I would like to know what happens to our banknotes when we exchange them in other countries? When I go to Cuba for example and give a $20 bill to get the local currency, what are they going to do with those bills next?
In the era of electronic transactions, banknote exchanges are becoming increasingly rare. However, for travelers, it is still very convenient to have a little money in local currencies when arriving at their destination or to pay minor expenses.
Therefore, exchange offices do not disappear and financial institutions continue to provide foreign currencies to meet these needs.
In Cuba or anywhere else in the world, an exchange office or financial institution that receives Canadian dollars in exchange for local currency notes can use the money it receives in various ways.
The institution can hold these funds in reserve to re-circulate them when the client needs Canadian dollars. He can also resell it.
This is what Desjardins does in its foreign exchange activities, explains its spokesperson, Jean-Benoit Turcoty.
“At Desjardins, depending on the currency, the condition of the cash and some other criteria, it is possible that a portion of these notes may be held, recirculated, withdrawn from circulation or sold to our foreign exchange suppliers.”
“It depends on the type of coin,” he says. If the demand for a foreign currency to be exchanged for Canadian dollars is sufficient, as is the case for euros or US dollars, the money changer will hold them in reserve to meet the needs of Canadian travelers who will need them before leaving for Europe or the United States.
If the demand for currencies is lower, such as the Japanese yen, the changer can keep some of them or resell them to his own foreign exchange supplier.
Financial institutions deal with foreign currency suppliers who concentrate the supply and demand for banknotes from all countries.
Thus, tickets of all nationalities circulate between buyers and sellers, always using safe transport services, such as those offered by Brinks or GardaWorld.
Not all currencies are available at all times. A Desjardins spokesperson said that if a customer needs a coin that is ordered irregularly, they should order it in advance.
It also happens that it is difficult to find a coin.
For example, Globex 2000, one of the main exchange offices in Montreal, warned its customers that the Brazilian real, ruble and rupee were out of stock last week.
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