In March 2020, GEL/USD exchange rates dropped to 1 USD = GEL 3.4 (I still remember days, when rates were 1 USD, equaled 1.74 GEL).
Most of the banks (if not all) act as market makers or they buy low and sell high. A normal business practice. If GEL/USD value drops to 3.4 GEL for 1 USD, there is no guarantee you are going to keep 340 GEL when exchanging 100 USD.
Today I decided to test - is it possible to use Transfer Wise to transfer funds inside Georgia and is it possible to transfer from USD to GEL. Spoiler alert: yes it is possible
Currency exchange rates on Bank of Georgia March 27, 2020
As you can see the buy/seel spread is 10 tetri here and bank will make money if you will decide to sell or buy USD.
So I decided to test two things:
- Is it possible to send USD to GEL inside Georgia using third party (Transfer Wise)
- Is it convenient
Here are my key findings:
- It's possible to move funds inside Georgia (from account to account) from USD account to GEL (or vice verse)
- It's is pretty convenient
- see bottom line for the drawbacks
How to send USD to GEL
1. Signup for the Transfer Wise account if you haven't yet. Log in and chose to Send Money
2. Chose Someone else
Send money using Transfer Wise
3. Enter recipient details
4. Chose Payment purpose
5. Review details of your transfer
6. How would you like to pay?
You can choose from Bank debit (ACH), Debit card, Credit card, Wire transfer or International wire. Each option has it's own commission, chose what suits you best
7. Paying with a debit card
I chose to pay with a debit card
8. Sit back and relax
For the test above I transferred 10 USD, but the recipient received GEL 28.04. If I would instead exchange the funds directly on my bank account and then transferred in GEL, I would get GEL 33.35. Most probably for a bank transfer then I would pay an additional 1 GEL and the recipient would get GEL 32.35, which is a difference of GEL 4.31
Exchanging USD to GEL via Bank of Georgia