Using SABB to convert Saudi riyals into USD and sending to USD account in UK?
Mar 31st 2020, 12:47 pm
#1
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Using SABB to convert Saudi riyals into USD and sending to USD account in UK?
Hi all,
I am about to send a chunky (for me) transfer back to HSBC in the UK from SABB bank in Saudi, converting from Saudi riyals to USD. I have an FX broker but they are quoting a margin of 1% over the pegged rate of 3.75 SAR : 1USD (they quoted something like 1 USD: 3.78 SAR). Normally I wouldn't mind, but for a big transfer this seems excessive. SABB themselves are saying they can convert SAR to USD at very close to the 3.75 peg. They quoted me something like 1 USD: 3.756 SAR, but that there is an "unknown" fee applied by the US intermediary bank that they use.
Has anyone here actually used this route in the past (Sar -> USD account in UK) and can they confirm if SABB/the intermediary bank sting you for any material hidden fees?
Thanks!!
I am about to send a chunky (for me) transfer back to HSBC in the UK from SABB bank in Saudi, converting from Saudi riyals to USD. I have an FX broker but they are quoting a margin of 1% over the pegged rate of 3.75 SAR : 1USD (they quoted something like 1 USD: 3.78 SAR). Normally I wouldn't mind, but for a big transfer this seems excessive. SABB themselves are saying they can convert SAR to USD at very close to the 3.75 peg. They quoted me something like 1 USD: 3.756 SAR, but that there is an "unknown" fee applied by the US intermediary bank that they use.
Has anyone here actually used this route in the past (Sar -> USD account in UK) and can they confirm if SABB/the intermediary bank sting you for any material hidden fees?
Thanks!!
Last edited by FriendlyExpat; Mar 31st 2020 at 12:50 pm.
Mar 31st 2020, 1:51 pm
#2
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Re: Using SABB to convert Saudi riyals into USD and sending to USD account in UK
To answer my own question, I found this thread from a few years ago (but which still seems to hold true). Exchange Rate SR-GBP When Sending Money Home It references that SABB offers an amazing rate for SAR -> USD conversion (but not other currencies).
I suspect this is because the USD:SAR peg is enforced on banks so that they cannot add an extra charge on top. Therefore, you get an extremely good (effectively subsidized) rate which cannot be matched overseas for converting SAR -> USD through SABB (and I assume other Saudi banks).
Note that if sending USD to the UK, you need to be sending to a USD dollar denominated account in the UK. HSBC and various other banks offer this service (but be aware that USD accounts pay no interest and typically have higher fees). Word of caution: DO NOT send USD to a UK pounds account, as the UK bank will likely convert it for you into pounds at a (I suspect) terrible rate.
If you do intend to eventually convert the USD -> GBP or something else, you'll take a second hit on the second conversion, but as USD->GBP is a common transaction you should get a pretty good rate on that too, and will probably end up better overall.
Your other option is to use a UK based broker who holds a SAR denominated account in the UK. They will then convert the SAR to GBP for you at a pretty good rate. This should give you a pretty good rate overall as well. Just make sure the broker is reputable. I am aware of the following brokers that offer this service (not a recommendation): clearcurrency, TorFX and GCEN. If you do this, you get your Saudi bank to send a SAR payment to the UK, the UK broker then converts to pounds and sends to your UK account.
I suspect this is because the USD:SAR peg is enforced on banks so that they cannot add an extra charge on top. Therefore, you get an extremely good (effectively subsidized) rate which cannot be matched overseas for converting SAR -> USD through SABB (and I assume other Saudi banks).
Note that if sending USD to the UK, you need to be sending to a USD dollar denominated account in the UK. HSBC and various other banks offer this service (but be aware that USD accounts pay no interest and typically have higher fees). Word of caution: DO NOT send USD to a UK pounds account, as the UK bank will likely convert it for you into pounds at a (I suspect) terrible rate.
If you do intend to eventually convert the USD -> GBP or something else, you'll take a second hit on the second conversion, but as USD->GBP is a common transaction you should get a pretty good rate on that too, and will probably end up better overall.
Your other option is to use a UK based broker who holds a SAR denominated account in the UK. They will then convert the SAR to GBP for you at a pretty good rate. This should give you a pretty good rate overall as well. Just make sure the broker is reputable. I am aware of the following brokers that offer this service (not a recommendation): clearcurrency, TorFX and GCEN. If you do this, you get your Saudi bank to send a SAR payment to the UK, the UK broker then converts to pounds and sends to your UK account.
Apr 1st 2020, 8:52 pm
#3
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Re: Using SABB to convert Saudi riyals into USD and sending to USD account in UK
As of today, SABB KSA will sell you one United States Dollar for 3.754 of your finest Saudi Riyals, equal to a margin of 0.1%. Can't imagine anyone else being able to beat that. Definitely best way to transfer money to UK!
Apr 1st 2020, 10:35 pm
#4
Joined: Feb 2010
Location: Buraydah , Saudi Arabia
Posts: 2,863
Re: Using SABB to convert Saudi riyals into USD and sending to USD account in UK
I get 3.7553 with ANB. The riyal dollar rate isn't really an issue. It's the dollar to pound rate you should be concerned with.
Apr 2nd 2020, 1:14 am
#5
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Re: Using SABB to convert Saudi riyals into USD and sending to USD account in UK
That's a good rate too. I'm keeping the money as USD for now, but when the time comes I'll just convert using a specialist broker in the UK. Overall, I think this gets the best outcome.
