Leading to a personal friend and how to deal with currency fluctuation

tom_murphy112 wrote: »

Not sure if this is the right forum, but finding myself in a pickle and wondered if someone can help me.

I lent a Friend in Northern Ireland X amount of money, now that she is paying me back and the Pound has fallen, I am finding myself in a situation where I will be loosing some money if she returns what I sent her. Is it reasonable to expect her to give me back what I lent in Euro ? talking about nearly a 500euro hit in my pocket otherwise ?

Your are taking the current exchange rate. Unless you need the Euro straight away, or you are convinced the exchange rate can only move against you, then you could hold on to the Sterling or part of it and wait for a better rate. The Euro was able to buy as little as 60 Pence and as much as 95 Pence at various times since it came in. Even looking back three years shows large fluctuations.

https://www.macrotrends.net/2553/euro-british-pound-exchange-rate-historical-chart

Another thing would be to keep an eye on Sterling and Euro exchange rates against other currencies like Japan and Australia. Maybe you could sell Sterling and buy Euro with one of those and get some value. I have no idea if that would be a runner, but there is no great reason to assume that Sterling and Euro will always fall or rise against every other currency at the same time.

Jim2007 wrote: »

Did you lent her Euro or Pounds and how did you agree to handle exchange losses when you made the loan?

Is this really necessary? We get that you’re a financial genius that never made a mistake but can you not just be content with revelling in your own infallible greatness without trying to have a dig at others for not getting everything 100% correct, 100% of the time?

You can take a fair guess at the answers to your questions from the OP, so if you have nothing helpful to say, why bother saying anything.

Pawwed Rig wrote: »

Fair point but now he is speculating on foreign exchange on which he could lose even more. The OP may be risk averse.

OP in the first instance have a look at what rate you are getting. A revolut account, for example, will give a better rate than your bank (2 or 3 per cent in some cases). Given the sums you are talking about this might help by a couple of hundred euros.

If they don't need to convert to Euros for their immediate living costs, then as I said the only reason to move quickly is if they are convinced the rate will only keep going against them. That speculation could just as easily lose them the chance to gain a few hundred some time in the next twelve months. Nobody knows, but rarely a week goes by without some movement up and down.

tom_murphy112 wrote: »

So I sent her euro from my account directly to her bank account. When I lent it I told her I am giving/sending you X amount of euro as that is all that I have. She didn't even bother letting me know how much she got and the issue only arose when she sent me back the money and it was 500 euro short.

I even asked her do you remember how much you got, to which she said - I am not sure :eek:

Either way I did ask her in a nice way to pay me what I lent her, it was all of the little savings i had and can't be taking a hit of nearly 500 quid in just few months.

If the agreement was to send X amount of Euro then you are right in expecting the same amount of euro back.

If you had an agreement to send X amount of sterling then it would be a little more complicated.

As you made a sacrifice in lending the money she should give it all back even if the 'markets' have turned against her. Show her the Euro amount and say 'that's what I need'. If she were much poorer than you I'd forgive it but as she isn't she has to return the euro value.

Do you know how much she received. If you sent euro directly to another currency account without using transfer wise or such, the bank will have taken a big chunk of it, both ways.

It's a reasonable ask bit it is a grey area. If you didn't clarify up front it is hard to insist.

In saying that, I wouldn't be lending again to a friend who doesn't seem to care that you lost a lot in trying to help them out