On Thursday this week, the Reserve Bank is likely to cut interest rates for the first time since the height of the Covid-19 pandemic. The anticipated decrease, which will come as welcome news to heavily-indebted consumers, follows a series of increases designed to curb inflation and which resulted in the repo rate hitting a 15-year high of 8.25% in May last year.
As welcome as a rate cut will be to anyone paying off a home, car, or student loan and to those with credit card or store debt, it has other implications too. At least some of these implications will impact individuals and businesses moving large sums of money internationally.
With the right strategies in place, however, they can take full advantage of any positive impacts of a rate cut while also mitigating any negative effects. One of the most important actions any person or business can take on this front is to ensure that they use the right international money transfer provider.
The impact of interest rate cuts on currency exchange rates
Before considering why choosing the right provider is so important, its worth understanding how interest rates can impact currency exchange rates.
