Dubai: Foreign currency exchange rates and service charges for sending cash abroad vary from one money transfer outlet to another, so expatriates might need to constantly keep an eye on them to get more value for their dirham.

Exchange rates, for one, fluctuate many times in one day and consumers can earn more or lose a lot in a single transaction.

Exchange houses and money transfer outfits usually fix their rates based on Interbank figures, which are primarily driven by changes in supply and demand of the currency in the foreign exchange market.

"Exchange rates are fixed based on Interbank rates which appear in the Reuters system as per the trades done worldwide on a real time basis," said Sudhir Kumar Shetty, chief operations officer for global operations at UAE Exchange.

"The rates fluctuate daily as this relates to the supply and demand for currencies. Exchange bureaus and banks review their buy and sell rates for a particular currency on a daily basis," added Jean Claude Farah, Western Union Financial Services vice-president for Middle East, Pakistan and Afghanistan.

However, the economic conditions of the sending or receiving countries, as well as the value or size of the money transfer can also cause the exchange rates to fluctuate, according to a source from HSBC.

"If people want to send money to their home country, the bank will need to purchase each payment currency. If more people send money home, the demand for the home currency increases, which will make the exchange rate fluctuate," an HSBC spokesperson said.

The spokesperson said in order to maximise the value of the dirham, expatriates should monitor the foreign exchange currency rates and determine the right time to transfer money overseas.

Service charges, on the other hand, are not affected by any volatility in the money market and are fixed for a certain period, unless local market conditions, like competition among money transfer outfits, require a revision in rates.

At some companies, service charges can vary depending on the amount and the countries to which the funds are being sent.

"The process of setting transfer charges is based on multiple factors - one of them being the receiving country and in particular, the size of its community living in the different countries around the region," said Farah.

"At Western Union, we always take into account the socio-economic factors along with other variables while setting the transfer fees. Additionally, we regularly review our policies and pricing structures in order to ensure that our fees remain competitive and in line with customer expectations," Farah added.

At HSBC, service charges for money transfers are based on the cost involved for individual real time transfers, processing charges incurred by overseas banks, customer services expenses including query handling from overseas banks, as well as market or industry trends.

Industry sources also said now is actually a good time to send money overseas as the exchange rates are favourable to expatriates working in the UAE.

"Now is an excellent time for expats sending money home. The US dollar has appreciated by over 30 per cent against the pound and over 16 per cent against the euro. As the UAE dirham is pegged to the greenback, expats' salaries are now worth a lot more at home," said Lisa O'Brien, chief executive officer of First Rate FX.

"Because of the appreciation of the US dollar against most of the Asian and European currencies, expatriates now enjoy a better exchange rate for their overseas money transfers," added an HSBC spokesperson.