June 2018

The Rise of Global Citizens

A new generation is re-shaping the world. The old tyrannies of place and distance are being overthrown by young entrepreneurs and professionals who think globally: they are the new global citizens.

Their employers might be in the United States, their clients in Singapore, and their family spread between Canada and China. This cosmopolitan existence is the new normal for global citizens, but it comes with its own challenges in terms of managing cash flows across multiple currencies and jurisdictions.

One of the keys to making a success of this global life is managing exposure to currency fluctuations. If you quote for a contract in Singapore dollars and the currency moves against you, transferring the payment back to Australia at the wrong time can make the difference between profit and loss. Similarly, if you are paying school fees in the United States, or thinking of buying a second home in France, the price can rise and fall unpredictably, making budgeting for success harder than it needs to be.

There is no way of entirely eliminating currency risk, but there are ways of mitigating it. Allocating cash in areas where you expect to have expenses, holding a payment in its source currency until the time is right, or diversifying your portfolio to hold assets in different jurisdictions can take much of the uncertainty out of managing foreign exchange risk.

Currency management in the palm of your hand
The most common solution is to open different bank accounts in multiple jurisdictions, but this is getting more difficult as global banking regulators tighten restrictions on non-residents holding accounts. Even where it is possible, they bring their own headaches: they are expensive to maintain; inter-currency transfer costs are frequently both costly and slow; and keeping an accurate tally of your overall financial position becomes a daily chore.

Fortunately, banks are responding to this need. Facilities such as the Citi Global Currency Account allows customers to hold up to 10 different currencies within Australia and transfer between them with excellent exchange rates. There are a number of advantages to these accounts, including clearer fee structures.

With the Citi Global Currency account, you can also hold a debit card and switch it between different currencies for day-to-day expenses while travelling overseas. Not only does this mean paying like a local but it facilitates cost tracking and makes it significantly easier to calculate expenses for re-imbursement.

Removing the guesswork these accounts take the guesswork out of managing your global finances. If, for example, you are paying tuition for a daughter at university in the United States, or preparing to invest in property in London, the money can be moved to a US dollar account or a sterling account ahead of time, hedging against the danger of an adverse currency movement closer to the payment date.

They also allow entrepreneurs to move fast when they spot an opportunity. A standard transfer to another currency can take as long as 3 – 5 business days– an age in the modern economy. The Citi Global Currency Account allows you to transfer between currencies instantly, ensuring that you have the money available where you need it when you need it.

The Citi Global Currency Account is a fast, transparent and cost-effective solution to many of the challenges faced by the new generation of global citizens.

Important Information:

This document is distributed in Australia by Citigroup Pty Limited ABN 88 004 325 080, AFSL No. 238098, Australian credit licence 238098. Any advice is general advice only. It was prepared without taking into account your objectives, financial situation, or needs. Before acting on this advice you should consider if it's appropriate for your particular circumstances. You should also obtain and consider the relevant Product Disclosure Statement and terms and conditions before you make a decision about any financial product, and consider if it’s suitable for your objectives, financial situation, or needs. Investors are advised to obtain independent legal, financial, and taxation advice prior to investing. Past performance is not an indicator of future performance. Investment products are not available to US people and may not be available in all jurisdictions.