Tag Archives: bank

Money Transfers

Every picture tells a story. Can you guess what this one is telling you?

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As you can see, it shows two shops, which are next to the traffic circle in Ialoveni, where Champa and I are serving as Peace Corps Volunteers. The yellow sign with the numbers showsIMG_1048 the latest exchange rates for the Moldovan leu relative to the U.S. dollar, the Euro, the Russian ruble and other currencies. The dollar has now slipped well below 17, continuing a slow descent I’ve discussed previously.

But something else is going on here, too. Look more carefully above the open door of the shop on the left. There’s a blue sign saying “Lucru legal în Europa!” In Romanian, that means “Work legally in Europe!”

IMG_1041It’s no coincidence this sign is adjacent to one showing exchange rates. In fact, it’s key to understanding the deeper meaning of the photo. It’s like the MoneyGram sign across the street, which says “transfer de bani,” or money transfer, or the Western Union sign up the block.

Everywhere you look in Moldova, banks and shops offer to transfer and exchange money. They are so ubiquitous, in fact, that you barely notice them after awhile, just like the fast food joints that cover our landscape back home.

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In the above photo in Moldova’s capital, Chișinău, there’s not only the shop with the red “Schimb Valutar” and “Exchange” signs but another one further up the block. Look carefully; it’s there. There are even more shops and signs as you get closer to places with lots of travelers, like the central bus station.

Moldova gets few foreign tourists, so the shops aren’t looking primarily to attract them. Nor are there many Moldovan tourists looking to buy Euros or dollars before heading on vacations in the other direction.

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No, all of this is a reminder of how many Moldovans have left their homeland to work abroad — especially in Western Europe but also in Russia and other eastern countries, as well as in the United States, Israel and elsewhere. As I’ve described previously, many of them must leave behind spouses and children, a story we hear again and again when we talk with our Moldovan friends.

When these foreign workers come home to visit, they often bring much of their earnings with them, or they may send money home with a trusted friend. Many also rely on banks and money transfer companies, comparing the fees, exchange rates and service to get the best deal.

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India and China, with their huge populations, are the world’s top “remittance-receiving” countries in overall dollars, followed by Philippines and Mexico. When calculated on a per capita basis or as a percentage of GDP, however, Moldova’s foreign workers are among the world’s leaders, as illustrated in the graph above, which is based on World Bank data. (I could not find a graphic with more recent data but there’s no doubt Moldova is still high on the list.)

 

Just like back home, much of this industry has moved online, for paying bills as well as for transferring and exchanging money. In fact, when I glanced last week at this yellow kiosk in the entrance to our local Market Victoria, I was startled to see bitcoin now listed as one of the options.

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You can certainly find money-exchange shops in the United States, too, especially in places with lots of foreign-born workers. I must have walked obliviously past the Western Union sign at my Harris-Teeter supermarket in Durham dozens of times until I needed to send money to someone in China. Then I noticed it. Every picture tells a story when you’re finally ready to see it.

 

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Dollars, Euros and Lei

These three photos show what’s happened to the U.S. dollar during the past several months.

 

I shot all of the photos here in Ialoveni, Moldova: the left one on October 26, the middle one on April 3 and the right one this past Wednesday, August 2. As you can see, a dollar sold here for 19.98 Moldovan lei on October 26, before briefly climbing above 20. Now it sells for only 17.89 lei, a decline of more than 10 percent.

That’s consistent with what’s been happening to the dollar around the world, as the New York Times reported on Tuesday, juxtaposing the dollar’s decline with a rise in the U.S. stock market.

How does this affect Peace Corps volunteers in Moldova? Actually, not much. We are paid in Moldovan lei, buy things in lei and have little reason to track exchange rates. Champa and I have lived comfortably within our Peace Corps budget, so have never sold U.S. dollars for lei except when we first arrived and exchanged a small amount. We rarely use our credit cards since Moldova is largely a cash economy. We also don’t buy much online, transactions generally calculated in dollars anyway.

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Many Moldovans work abroad and send money home, so exchange rates matter to them. IMG_6681However, they generally pay more attention to the Euro than the dollar; indeed, prices for some goods and services here are quoted in Euros rather than lei, as we learned when we considered renting an apartment. The Euro has not fluctuated as much as the dollar recently. IMG_6679

Banks and money exchange centers here also focus on the Romanian leu, the Russian ruble and the Ukrainian hryvnia — not so different from Americans paying attention to neighboring currencies such as the Mexican peso or the Canadian dollar.

Peace Corps Moldova calculates its budget annually, so it’s not affected immediately by currency shifts except in a few ways. For example, a small percentage of volunteer paychecks is designated for personal travel and pegged to exchange rates. The overall impact is so small, though, that many volunteers probably didn’t notice the recent dip. IMG_6680(That included me until I started writing this post.)

Moldova faces serious economic challenges but currency fluctuations here have been far less dramatic than in some Peace Corps countries. The agency’s financial planners elsewhere sometimes have to scramble in response to big swings, as do the State Department and other parts of the U.S. government, along with  international companies, travelers and others.

A few months before we arrived here in June 2016, the dollar was even lower than it is now, so the rise above 20 may have been outside the usual range. I’m told it was a response to Brexit, the U.S. presidential election, Federal Reserve policy and other things I cannot claim to fully understand, much less explain here.

Nor do I really care. For me, a person who enjoys math and numbers, it’s just been something to notice occasionally as I walk to work.

One doesn’t become a Peace Corps volunteer to get rich. For all of us serving in more than 60 countries around the world, our mission is to serve our local communities and promote friendship between Americans and other people. Ultimately, that’s the currency that matters, not the ones shown on the ever-changing bank signs.