The iSavta Team | 13.11.2019

Disclaimer: this article is not to be considered as financial advice, nor a recommendation to buy / sell / invest in any of the currencies mentioned. We are all familiar with this scenario: earning money in Israeli Shekels, buying US dollars and having someone pick a local currency (Philippine Peso, Indian / Sri Lankan / Nepali Rupee, Russian / Ukraine Ruble etc). Basically we deal with 3 different currencies, and with the constantly moving exchange rates between these currencies. Many times these exchange rates are not very clear, especially between the USD and the local currency. Nothing new till now. If we don’t have a choice, we just have to go through the motions, buy USD, send it home and hope for good rates. However, now we can play this game a bit differently to our benefit. First thing to be noted is that the USD is very close to its 5-year-lows vs the Shekel, as you can see in the graph below (courtesy of Uncle Google):

Why is this helpful for us? Because when we buy USD these days, we pay less Shekels for each dollar, so we get more dollars for the same amount of Shekels. It’s almost like the dollar has just gone on sale, and we benefit from this discount. Now if something that we use all the time has gone on sale, naturally we’d like to buy as much as we can from it, right? Consider for example your favorite socks. Since you use it all the time, and since it won’t get spoiled or rotten, you might to consider buying a few pieces right now, since you don’t know if this great price will be available for you in the future. If the price drops even further, then you can buy even more pieces, at a better price. The same logic can be applied to buying USD. It won’t get spoiled or rotten, and if it’s now on sale, you might want to take advantage of that and buy as much as you can. If the price keeps going down, you can buy even more. Another benefit in our specific case of sending money home is that now, instead of dealing with 3 currencies and their respective exchange rates, now we deal only with 2 currencies, as we’ve taken the Sheqel out of the equation. Less moving parts, simpler process. We always have to keep in mind that no one can project or even estimate the future exchange rates. The exchange between the USD and the Shekel is a result of sooooooo many factors (the US threatening Syria, local politics in the US and in Israel, global economics and many many more…), so it’s virtually impossible to determine if this is the lowest rate for the dollar vs. the Shekel. It can certainly drop a lot more in the very near future, or later on. But if you follow this exchange, and if you feel comfortable with this rate, buying dollars is something you may want to consider. Now the only question is where to keep these dollars you buy. Clearly it has to be very reliable and hopefully insured location. The Doar Visa Prepaid $ Card is a great solution for this, as you already keep your money at the Doar, and as this card is insured (Based on the provisions of the Debit Cards Law, 5746-1986, mark B, section 5). You are able to keep up to $2500 on the card at any given time, please read more about it here. Another way is buying only half or a third (or whatever fraction you feel comfortable with…) and gradually buying more and more as you see fit. This is another way of playing this situations while reducing risk. Again, this is not financial advice. It’s a possible way of using awareness in order to save money. We can all develop the habit of following the exchange rate, and making decisions based on our judgement, whenever we feel comfortable and know what we are doing.