According to the bank, there are three kinds of telegraphic transfer, letter exchange rate and bill exchange rate.
1, Exchange rate of telegraphic transfer exchange rate is the domestic bank that manages after selling foreign exchange, entrust its foreign branch or agency bank to pay a kind of exchange rate that payee place uses with telegraph namely.
As A RESULT OF TELEGRAPHIC TRANSFER PAYMENT IS QUICK, THE BANK CANNOT OCCUPY CUSTOMER CAPITAL POSITION, IN THE MEANTIME, THE TELEGRAPH CHARGE BETWEEN INTERNATIONAL IS HIGHER, SO TELEGRAPHIC TRANSFER RATE IS TALLER THAN GENERAL EXCHANGE RATE.
But SPEED OF TELEGRAPHIC TRANSFER ALLOCATES CAPITAL IS FAST, BE HELPFUL FOR ACCELERATING INTERNATIONAL CAPITAL TURNOVER, BECAUSE THIS TELEGRAPHIC TRANSFER HOLDS GREAT PROPORTION IN.
2. Letter exchange rate The letter exchange rate is a kind of exchange rate used by the bank to issue a payment authorization letter and send it to the payee of the bank at the place of payment by mail.
The exchange rate for M/T is lower than that for T/T because it takes some time for the payment order to be delivered and the bank can hold the customer’s funds during this period.
3. Exchange rate Exchange rate refers to the exchange rate at which a bank, when selling foreign exchange, issues a bill of exchange paid by its foreign branch or agent bank to the remitter, which is brought by itself or sent abroad for withdrawal.
It is divided into short – term and long – term, and its exchange rate is different.
Because banks can use customer funds for longer periods of time, the long-term exchange rate is lower than the short-term exchange rate.
