EUR BGN - The worst exchange rate I have ever seen

#1

I’m using Revolut for a while and was very happy with it until today. After making a few purchases with my Revolut Visa, I noticed that the exchange rate between EUR and my local currency BGN was just terrible. There is a currency board between EUR and BGN with a fixed rate of 1.9558. Until now Revolut’s rate was very close to this, however today this rate was 1.92, which is in fact the worst rate I have ever seen. I read on forums that Revolut apply 0.5-1% fee during weekends when Forex markets are close to protect against losses. However, first of all the difference between 1.95 and 1.92 is more than 1% and second this is absolutely unnecesary, because the rate of 1.9558 is fixed and it will never change.

ECB’s currency rate graph looks like a dead man’s pulse:
https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/eurofxref-graph-bgn.en.html

What bugs me the most here is that Revolut is being advertised as having the best possible rates, this is written on the main page, however this is actually the worst rate I’ve seen. I can basically get a better rate anywhere, even PayPal’s rate is better.

6 Likes

#2

I was also astounded by the rate today when I did a couple of transactions. I’m really interested in what the explanation for this is.

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#3

Most people think that the currency market (forex) is closed during the weekend, but this is not true. It is only closed to retails traders, but it is always open for the central banks and the related organizations.

Source : https://www.luckscout.com/what-are-the-weekend-gaps-in-forex-market

So the 23h59 Friday rate is just an indication, it can and will evolve during the week end.

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#4

Hum OK the rate is fixed, I agree with you this is strange…

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#5

Well Revolut themselves say the market is closed on weekends in the FAQ:

Source: https://www.revolut.com/bg/help/transaction-issues/card-payments/exchange-rate-for-my-card-payment-is-wrong

However, in the current case the rate is fixed and never changes, so this shouldn’t affect the exchange rate anyway

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#6

I am also very disappointed by the provided EUR/BGN exchange rate of 1.92, which is almost a 2% difference compared to the official rate of the Bulgarian Central Bank, which has pegged BGN to the EUR at a rate of 1.95583
It doesn’t make any sense to “protect against risk” during the weekend, just because risk of changing the rate is practically equal to zero.
Please check it with your providers and their suppliers, the rate you are pulling for this currency pair is far from the market one.

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#7

in 3 hours things should go back to normal :slight_smile:

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Another weekend markup joke by Revolut. EUR with 2,7% markup. This is ridicolous!!!
#8

@mirron, the FX markets might not be “closed” at the weekend, in that there is no organisation or system that opens or closes, but there is no liquidity - in other words, no tradable bids or offers. Even if there is a small amount of liquidity, the spreads are so wide that you could drive a bus through them. The lack of liquidity is from Friday 5pm New York to Monday 7am Auckland.

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#9

There is liquidity and they are organisations trading currency over the week end.

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#10

Show me a screenshot from an interbank FX trading system (e.g. EBS or Reuters Matching) during the weekend showing tight spreads, and I will believe you.

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#11

I already answered this : The currency market (forex) is closed during the week end but only for retails traders, it is always open for the central banks and the related organizations.

You don’t seriously think there is no currency exchange on the whole planet during 48h every week ?

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#12

The FX markets are not closed at all at the weekend; there is simply insufficient liquidity to trade. Retail FX does continue at the weekend, but given that retail FX typically has very wide spreads, it often doesn’t matter that there is no wholesale liquidity for retail price makers to manage their risk.

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#13

@NFH This is correct.

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#14

And back to the initial problem here revolut should hold the money until it’s safe to exchange instead of debiting immediately including a huge spread and therefore sticking to the promise of 0%

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#15

This is not possible, the big spreads are here for Revolut protection against weekend liquidity.

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#16

if you keep the money held including a big spread, you can safely release the funds on the other end and wait until the liquidity problem is sorted before calculating the real exchange and debiting the right amount

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#17

Unless, as it was suggested on another thread about EURPLN, Revolut’s business model actually depends on these extra profit days

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#18

@alejandro.mery This is indeed a good idea

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#19

Long story short:

  • The EUR/BGN rate is fixed, so there is no risk and there should be no markup. And while there is a markup, it should be 0.5% as promised. Since the FX markets don’t set the rate of EUR/BGN, they don’t matter here.
  • Other banks give you the Mastercard rate which is actually not that bad. Assuming no bank is a charity, it’s pretty clear that R exaggerates the ‘risk’ for which is takes a markup a bit. I’d prefer a more transparent pricing policy.
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#20

Exactly my point, thank you! The spread they apply is just too much.

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