With the price of the US dollar skyrocketing, Bangladeshi travellers are directly affected by fluctuating exchange rates. Should you then drop your travel plans until the price of the US dollar becomes stable? Is there any way to deal with this dollar crisis and still travel? Let’s look at some alternative ways to travel abroad without purchasing US dollars.
WHY YOU SHOULD CONSIDER ALTERNATIVES TO BUYING US DOLLARS
Traveling abroad can be an exciting and enriching experience, but it can also be expensive. One of the biggest expenses of international travel is the cost of converting Bangladeshi taka into the currency of the country you are planning to visit. Travellers usually carry US dollars when visiting any foreign country.
The recent price hike of US dollars has made the exchange rate high regardless of the base currency. Therefore, it would be wise and cost-effective for travellers to consider the alternative ways.
WAYS TO TRAVEL ABROAD WITHOUT BUYING US DOLLARS
• USE CREDIT CARD
Bangladesh Bank advises taking dollars through an international card (dollar-endorsed VISA/Mastercard) in case of traveling abroad. It has given this advice due to rising exchange rates and supply shortages in banks and open markets. The difference between the cash dollar price in the open market and the bank is currently over Tk 10.
It is cheaper to endorse dollars on your credit card. In the current situation, it may save you around Tk 5 to 10 per US dollar. However, currently, the exchange rate for cash and card endorsement is the same, which is Tk 106 (as of January 12).
According to a news in August 2022, when it cost up to Tk 109.50 to buy one US dollar in the open market, the price of buying dollars through a bank or card went up to Tk 95.
“This is why we are recommending travellers to request their banks to ask for travelcards instead of asking for cash, so that they pay less,” Bangladesh Bank spokesperson Sirajul Islam told media at that time.
• BUY THE LOCAL CURRENCY OF YOUR TRAVEL DESTINATION
Buying the local currency of the country where you are traveling can reduce your exchange cost. The exchange rates of different currencies against the US dollar have also gone up. So, you can check if buying your destination country’s currency reduces the cost or not. For example, if you are travelling to India, buying rupees from Bangladesh may give you more currency than converting to the US dollar. You
• USE DIGITAL WALLET
Many countries now accept digital wallets such as Apple Pay and Google Wallet. If you plan to travel to a country that accepts these types of payments, you can avoid the need to convert your currency altogether. You can load currency using a third-party service.
• TAKE ADVANTAGE OF FOREIGN ATMS
When you are in a foreign country, it can be more cost-effective to withdraw cash from an ATM than to convert currency at a bank or currency exchange shops. If you have a dollar-endorsed card from Bangladesh, you can withdraw money in the country you are traveling to using the local ATMs.
However, check with your bank to ensure that your card will work in the country you are planning to visit and see if there are fees for using foreign ATMs.
International Vacations without Dollars
HOW TO BUY CURRENCY OF THE DESTINATION COUNTRY FROM DHAKA
There are many government-registered money exchange shops in Dhaka. You can exchange your taka with the desired currency and endorse it in your passport. This way, you can take your destination country’s currency legally.
Buying the local currency of a country before reaching there can be a good idea for several reasons – both from an economic and a practical standpoint.
Economically, buying the local currency in advance can help protect against currency fluctuations and currency crises. For example, if the value of the US dollar were to drop significantly against the local currency, having the local currency at hand would mitigate the financial impact of this change. Similarly, in case of a currency crisis, having local currency can protect you from the volatility of the affected currency.
From a practical standpoint, having local currency at hand can make travel much easier and more convenient. For example, many stores do not accept foreign currency or credit cards, and having local currency can make it easier to pay for goods and services.
HOW TO ENDORSE FOREIGN CURRENCY IN YOUR INTERNATIONAL CREDIT OR DEBIT CARD
You can endorse foreign currency in your card from the issuing bank. However, you will need a valid passport for the endorsement service. You can visit your bank and ask for the endorsement. The bank will do it without any hassle. But make sure you have a dual currency credit or debit card to get this service. Now, most banks offer dual currency cards. If you don’t have a dual currency card, you can get one from private banks.
However, you cannot have unlimited currency on your card. The new law by Bangladesh Bank introduced in 2020 states that a person can endorse a maximum of 12,000 US dollars or equivalent foreign currency in a calendar year.
From 2020 onwards, adults can endorse US$ 12,000 per year, and children under 12 can endorse half of that, US$ 6,000.
FINAL WORDS
The values of local currencies against the US dollar are depreciating in different countries including Bangladesh. Due to the dollar price hike, the costs of diverse commodities, services, and facilities are rising. The traveling expenses have increased significantly in recent months. To overcome this issue, we have suggested some ways to travel abroad without buying US dollars.
By using one or a combination of these methods, you can cut down the expenses of converting your currency and have more money to spend on your trip. However, it is important to check with your bank or credit card company to ensure that you understand the fees or restrictions that may apply. Happy travelling in 2023!
Source: United News of Bangladesh