exchange USD for Rmb

Posted by mandrookie (36 days ago)

Hi,

maybe you guys can explain me the bellow episode i witnessed.

I was in a popular wholesale market from GZ.
There was a small booth exchanging money. Obvioulsy, not announced.

IN less than 30 min, i saw more than a dozen of people, mostly foreigners, exchanging RMB for USD .. and USD for RMB (specially).

The exchange rate USD to Rmb was ... 7.35! So, for 10 000 USD you'd get 73 500 RMB.
the guy exchanging would even mark all the bills, so that no one would come back complaining about getting fake bills.

What's the catch?????????????????
How can this guy make money?? surely the people getting RMB were more than HAPPY!!

ahh, this was JULY 2008!

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Posted by gzexpert (36 days ago)

In my experiences, the small shops in that market alway offer several pips higher than Bank Of China. e.g. You can exchange 675.97RMB with 100USD in BOC. maybe you can exchange 679RMB in the black market. I can`t believe you can get 735RMB with 100USD in that black market. If I can get 73 500 RMB with 10 000USD, I will use the 73 500 RMB to exchange 10 786USD in BOC again. everytime I can make 786USD!!!! Who believe? I don`t.

Posted by mandrookie (35 days ago)

I wouldnt believe it either... but i saw it. and believe me, i know exchange rates!
Yes, thought about going to BOC too ...
I just dont understand.. how can the guy exchanging money .. be making money?

Posted by lost in gz (33 days ago)

today's official exchange rate is 6.82 rmb to 1 USD.

the 7.35 rate may be the rate they use for giving you USD, in exchange for your RMB. if this is true, they are making a killing. folks who have no id, may have no choice but to trade at a loss.

but it does not make economic sense for money exchanger to lose money by giving you 7.35 RMB for each USD.

perhaps you are witnessing a scam. if it's too good to be true, it'd probably is.