UK economy in a period of uncertainty as talk of EU withdrawal lingers

Dithering over the UK's future in the EU is the last thing the British economy needs right now and for the sake of SMEs, the Prime Minister needs to bring some certainty to the table.

The impact on the British economy and Sterling of a UK withdrawal from full EU membership is potentially enormous. Even speculation around such a move is making waves both here and abroad, as recent warnings out of Europe and the US have demonstrated. Matters of immigration, employment, taxation, trade and investment, tariffs as well as exports and imports are just some of those overseen by the EU, which would likely need to be redefined if the UK were to go it alone.

While this may create a favourable opportunity for British businesses, as the opportunity could be seized to cut red tape and enhance growth policies, or cause woes for Britain by isolating it from its major trading partners in Europe, the main concern at present is the lack of certainty over the government's stance on the issue. Such uncertainty is causing volatility in the currency markets and hindering the ability of UK businesses large and small to plan for their future.

It is crucial this debate reaches the light of day and is explored in full, instead of being left simmering in the background. The global economy is uncertain enough in 2013 for British firms and employees, without blurring the lines even further by avoiding the issue.


For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Transfer money to China in Renminbi (CNY or RMB) – What you need to know

 You can transfer money to China with Smart Currency. Smart offer you the facility to make money transfers into Chinese Renminbi (CNY) bank accounts in mainland China and Hong Kong.

China is a very highly regulated destination for money transfers, and sending money there can sometimes be difficult. Before you make any money transfer to China, read our guidelines below so that you are aware of the requirements for payments being sent to the China and Hong Kong in CNY in order to avoid payments being delayed or returned.

If you are unsure or require any further information or assistance, we would be more than happy to help.

Existing clients can go directly to their trader, or if you are interested in speaking to us at Smart, send us an email at info@smartcurrencybusiness.com, call us on 020 7898 0500 or visit the Smart Contact page.  

Businesses transferring money to China

If you are a Business wishing to make a payment to another company in China or Hong Kong in CNY:

The receiving business in China must be a 'Pilot Enterprise’ (i.e. approved by the PRC regulatory authorities) – Check with your beneficiary that they are a Pilot Enterprise BEFORE making any payment instructions.

If you are a Business wishing to pay salary/expenses/dividends of employees or shareholders based in China in CNY:

Your money transfer must be paid to a UK Corporate account with a bank in China. Please make sure the account details provided to us are valid for this purpose BEFORE booking a trade with us.

If you are an EU importer wishes to pay a supplier in China in another currency e.g. USD:

These transactions fall outside the RMB (CNY) trade settlement scheme's scope but are permitted. Contact Smart Currency Business for help regarding any foreign currency exchange requirements.

If you are an EU exporter invoicing  their buyer in China in another currency e.g. USD. Where the buyer pays in USD

These transactions fall outside the RMB (CNY) trade settlement scheme's scope but are permitted.

Individuals sending money to China

There are even further restrictions when individuals are in need of transferring money to China in CNY. With Smart Currency, your payment requirements will be taken on a case-by-case basis and we would be more than happy to assist you with information regarding sending CNY to China. Please get in touch with us to see how we can help reduce the costs of your money transfers.

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit the Smart Currency Business website

Currency Update - Euro close to 1.20 against sterling

Sterling suffered its biggest weekly loss against the euro in almost a year last week as the fragile state of the UK's economy started to be reflected in the markets.

We are approaching a key support level of 1.20 interbank as sterling continued its bad week on Friday dropping for a sixth consecutive day against the euro falling to 1.2060 - the lowest since April 2012, following the release of terrible manufacturing production data which showed it shrinking by 0.3% when growth of 0.5% had been anticipated.

Very difficult to say what will happen if we reach the 1.20 support level but if breached, we could see a rapid loss in the value of sterling against the euro or we could see sterling bounce and start to regain lost ground.

If you are making regular transfers then it may make sense to secure part if not all of those transfers for the next three to twelve months.

If you are making larger transfers either way (sterling into euros or euros into sterling) then it may be sensible to do the same thing by either securing all or part of the amount to be transferred. Remember we can secure rates into the future using a forward contract.

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Financial market movements - what events will make an impact?

Smart Currency Business Director Carl Hasty speaks to the press about the impact of elections, changes in national government and international events which could effect financial and currency markets.

“With the silly season behind us for another year, everyone is turning their attention to the year ahead and pondering the likely impacts on business operating conditions.

One often overlooked aspect for international traders is elections and leadership changes, which have the potential not just to affect domestic policy within that country but a variety of conditions including the currency, taxation, import duties and so forth. Currencies are particularly vulnerable to the uncertainties created in the days and weeks leading up to an election as speculation mounts on who will govern the country.

Israel is getting restless in the lead up to an election in 2013 and the Australian minority government is trailing in the polls with an election due by November. However, the uncertainty created by elections will be felt nowhere more sharply this year than in Europe, where most governments’ popularity is suffering at the hands of austerity measures.  Italy goes to the polls at the end of February, following Prime Minister Monti’s decision to step down.

More significant though will be Germany’s general election, when the rest of the world will be anxious to see whether Angela Merkel retains power and with it her grip on the Eurozone debt crisis negotiations. At present, it seems uncertainty itself is the only sure bet, meaning the world’s key currencies – particularly the Euro – may be in for a bumpy year ahead.”

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

Government looking to boost SME innovation with further funding

Comments from the Corporate Desk at Smart Currency Business:

“The Government's announcement last week of a second round of Innovation Vouchers is a welcome boost for UK SMEs in securing their longer term future – however it does little to help them through the austerity-plagued quagmire of the current economic setting. Universities and Science Minister David Willetts said expansion of the vouchers programme with the injection of a further £1.1million would encourage small businesses to develop new ideas. While it does show the Government is looking at ways to boost innovation, the application process and quarterly distribution of funds – rather than as and when an application for funding is approved – demonstrate a continuation of the red tape SMEs must face in the gamble to secure limited government support for their growth.

In the immediate term, SMEs would do better in 2013 by analysing their current operations to identify ways to cut costs and streamline existing processes in ways that do not adversely affect output. Whether it be finding more competitive partners and suppliers, negotiating better payment terms, insuring against unforeseen troubles or accessing specialist advice to tackle complex operating issues, auditing your firm's finances could be just the ticket to strengthening the business' position for a happy and prosperous new year.”

For more information on Smart Currency Business call: 0845 638 0571 (or +44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyBusiness.com

The Smart way to make company relocations more cost effective

Unfortunately for many businesses and their employees, the issue of currency exchange becomes an after-thought when relocating abroad – despite the potential for this aspect to be the most costly of all.

There are plenty of things to consider when undertaking an international relocation. There is selecting a removals company, organising accommodation in the new country, arranging visas for staff moving outside of the EU, ensuring adequate transit insurance is in place, booking flights, sorting what equipment will be relocated...the list goes on. Yet managing currency transfers is all-too-often forgotten.

International relocations will affect an employee individually, the company's HR division as well as the business at large, so the costs of overlooking any means of achieving substantial cost savings can have wide-felt reverberations.

HR departments must ensure that any relocation produces cost benefits and/or improved efficiencies in order for the move to be feasible. There is also a duty of care for employees, while maintaining a satisfactory level of productivity.

This requires a careful balancing act, making the move attractive for employees so as not to lose skilled workers, while meeting budgetary constraints.

When making payments associated with an international relocation, HR managers should look not just at the costs of the required services but also the exchange rates they are receiving to ensure optimal value is being achieved. Foreign-denominated costs can include immediate employee expenses, employee accommodation, visa applications, taxation registrations, local insurance coverage and so forth.

For a business as a whole relocating offshore, the cost burdens will be even more acutely felt. Indeed, changes in exchange rates can mean the difference between profit and loss on future transactions, and even negate the need to move at all.

Exposure to currency rate fluctuations does not just affect the cost of the immediate relocation.  On an ongoing basis, exchange rate movements directly affect the cost of imported materials, the competitiveness of exports and the profit margins on sales. Exchange rates also have more wide-reaching affects, such as on the price of energy and cost of living – affecting business operating costs and staff wage pressures.

Indirectly impacting on businesses are the impacts on the employee. Even if the business directly covers the costs of their relocation, there will still be personal costs incurred, such as transferring money from the sale of UK assets, accessing their salary and personal travel back to the UK.

Prohibitive costs in these areas have the potential to reduce the attractiveness of a relocation to employees, result in demands for higher relocation allowances or lead to employee stress which, in turn, affects staff productivity and morale.

Given these wide-reaching effects of adverse foreign exchange transactions, it is crucial for business operators to consider whether currency risk mitigation strategies are factored into their  overall risk assessment and management strategy.

There are a number of ways businesses can reduce currency-related costs during a relocation. For example, forward contracts enable a favourable rate to be locked in for up to 12 months in advance, and are a valuable means of delivering cost certainty and budget integrity. Orders to buy allow non time sensitive transactions to be completed once market rates reach a a pre-determined point. And a limit order allows a business to set a floor under the price at which it is willing to make a trade, so as to restrict wild fluctuations and protect against losses from adverse rate movements.

Once a risk mitigation strategy has been formulated, the next step is to determine a way of implementing it that does not add to the already numerous expenses incurred as part of the relocation.

Far from being effective management tools, high street banks are actually the least efficient avenue in which to pursue currency transfers. Notorious for poor customer service and lengthy queues – both in person and over the phone – banks also charge hefty transfer fees on most transfers for SMEs.

These fees can equate to £30 or more per transfer. For businesses making dozens of transfers each week or month, these fees can quickly add up to thousands and even tens of thousands of pounds. Banks also effectively double dip on currency transfers by providing less-than-competitive rates of exchange.

In any aspect of an international relocation, Smart Currency can offer significant cost savings and added value – at no direct cost to the user.

As a reputable international payment specialist, Smart Currency Business assists UK SMEs by offering tailored risk mitigation planning, access to all of the major currencies and the full suite of currency transfer services. Smart does not charge transfer fees on transactions over £3,000 and offers better-than-bank exchange rates which deliver savings of as much as 4 per cent of the value of the transfer.

For the individual, Smart Currency Exchange assists clients on large and regular transfers, which are both handled efficiently and very cost-effectively. This personal service is a great help during what can be a difficult and stressful time.

For more information on how Smart Currency Business can reduce the costs of an international relocation for your firm and your employees, call us today on 0207 898 0500.

Case study: Claydon Drills

When your livelihood depends entirely on the whims of Mother Nature, it is absolutely vital to address the areas of your business that you can establish complete control over. This is the issue faced by Suffolk based company, Claydon Drills, who design and manufacture agricultural seed drills for farmers.

Denise Claydon tells us: “Our industry is 100 per cent weather dependent so if there is a bad year, of course this impacts on sales of our drills. 2012 has been a year of uncertainty. Some places haven’t even harvested yet and unfortunately this takes its toll”.

Claydon Drills came to life after Denise’s husband designed and built his own seed drill. After a neighbour caught glimpse of the innovative design and enquired as to whether he could purchase one of his own, word spread and soon their drills were being sold throughout the UK and across the water in Europe. With a need to pay suppliers in Germany and Italy, the company turned to their high street bank to complete the transfers.

Denise explained: “We used to have to travel to the bank, queue, wait in the bank for half an hour while they manually checked everything and then leave not knowing when they payment would clear. Inevitably it would take about a week and as business grew and we needed to pay suppliers more efficiently this level of service was no longer acceptable. This is when we began our search for a currency expert, found Smart and since that day, we haven’t looked back”.

“Initially Smart enticed us with good exchange rates but it was the incredibly simple process, excellent customer service and invaluable advice offered by Alex Bennett on how we should budget for international currency transfers which made us continue to use them. If I were ever to encounter someone who could benefit from their service like we have, I wouldn’t hesitate to recommend them!”

The message is clear. Managing your foreign currency exposure effectively is a vital requirement of any business that deals internationally. The team at Smart Currency Exchange have a unique understanding of the challenges faced when doing business internationally.

To find out more and download a free currency report go to www.SmartCurrencyBusiness.com or call Freephone 0845 638 0571 (or +44 (0)207 898 0500).