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For access to your online account please contact your personal account manager, alternatively email team@regencyfx.com.
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For access to your online account please contact your personal account manager, alternatively email team@regencyfx.com.
In foreign exchange (FX), the spread is the difference between the buy rate and the sell rate for a currency pair.
When you exchange money, you’re not trading at a single global rate, you’re trading at a price that includes the spread. This spread reflects the cost of executing the trade.
For example, if you see USD/ZAR (South African Rand) quoted at 18.00 / 18.72, that means:
The difference (0.72) represents the spread, in this case, about 4%.
For other currency pairs such as EUR/USD or GBP/EUR, spreads can be as low as 0.1% - 0.5%. But for exotic currencies, they’re typically wider and often between 2% and 6%.
Exotic doesn’t mean rare, it refers to currencies from smaller or less frequently traded markets such as the Thai Baht (THB), Kenyan Shilling (KES) or Philippine Peso (PHP).
These are traded less frequently than other currencies such as the US Dollar or Euro. Typically, there are fewer buyers and sellers so prices move more sharply when trades occur due to low liquidity.
Low liquidity means that additional risk needs to be reflected in pricing to account for potential sudden market movements.
A common question we often hear is “I saw a rate online that’s much better, why is your quote higher?”
Most online rates (like those you see on Google or XE.com) show the interbank rate. That’s the wholesale price banks trade at with each other, typically in millions.
Retail transactions, corporate payments or smaller trades don’t access that rate directly and instead, they’re priced with a spread added, which covers:
So, if you’re quoted a 4% spread on an exotic pair, it’s not an extra charge. It’s a reflection of current market conditions and real trading costs.
Exotic currencies have higher volatility and limited convertibility, meaning:
For example, when trading USD/NGN (Nigerian Naira) or USD/KES (Kenyan Shilling), the liquidity may dry up suddenly and prices can move 1-2% in a day.
To protect against that, FX providers build a buffer into the rate, which is typically around 3–5%.
So when you see a 4% spread, that’s not the provider “adding extra”; it’s simply the cost of accessing that exotic currency safely and reliably.
Here are a few tips to make sure you’re getting the most competitive rate possible:
When getting a quote online, make sure it is the same currency pair and transaction size.
Smaller amounts normally carry wider spreads. By doing your transactions in one trade, you will typically get a better rate.
Rates fluctuate during the trading day. Asking for a live quote before transferring can help you catch a better rate. With Regency FX, you get a dedicated account manager who monitors the market on your behalf, keeping you informed of key movements and helping you trade at the most advantageous time.
Choose a currency exchange expert that is authorised and regulated by the Financial Conduct Authority (FCA). As an FCA-approved firm, we adhere to strict standards of transparency, security and compliance to protect your funds and ensure fair trading practices.
Major pairs like EUR/USD or GBP/USD usually have spreads below 0.5% due to how liquid the markets are.
Fewer global participants, less demand and regulatory differences mean fewer trades happen daily, making pricing more volatile.
Yes. Spreads fluctuate depending on trading volume, volatility and market events. Exotic pairs can widen sharply during low-volume hours.
They’re indicative rates, not executable ones. Real quotes include the spread needed to complete your transaction securely.
Ask your provider to explain the breakdown. A 4% spread on exotic currencies is generally within a normal, transparent market range.
In foreign exchange, spreads reflect reality, not markups. For exotic currencies, a 4% spread is a fair and transparent reflection of market risk, liquidity and execution costs.
At Regency FX, we take pride in offering more than just great rates, we provide expert guidance and personal support every step of the way. Whether you’re sending funds abroad, paying suppliers or purchasing property overseas, our dedicated account managers and tailored solutions ensure your transfers are secure, efficient, and competitively priced.
With high-value transfer capacity and a focus on trusted, one-to-one service, we help you move money with confidence.
Get a free quote today
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