Why Are Some Denominations Bought Cheaper Than Others—Even in the Same Currency?

In this blog, we break down a common question faced by money changers: why are some notes of the same currency bought at a lower rate than others?

Not All Notes Are Equal—Even Within the Same Currency
When exchanging money, customers may notice that smaller denominations (like USD 1, 5, or 10 notes) are bought at lower rates compared to higher denominations (like USD 50 or 100). This difference often raises questions—but it’s not due to bias or unfairness. It’s based on real, practical reasons.

Handling Costs and Demand Differences
Smaller denomination notes take up more space, are harder to count in large volumes, and incur higher handling costs for both money changers and their wholesale partners. They are also less in demand in international trade or banknote dealing.

Larger denominations are more efficient to transport and are typically preferred for settlement, making them more valuable on the wholesale market.

Resale Value Matters
Money changers don’t just buy currency—they also resell or export it to overseas partners or institutions. The resale value of smaller notes is often lower or even rejected by wholesale buyers due to limited demand. This directly affects the buy-back price offered to customers.

It’s a Global Market Practice
This pricing difference isn’t unique to Singapore. Around the world, banknote pricing reflects demand, logistics, and industry costs. It’s a transparent, rational process rooted in how currency is actually traded and handled in bulk.

Conclusion
While all denominations carry the same face value, their wholesale worth can vary. Money changers adjust their rates accordingly to remain fair and sustainable. Understanding this helps customers make informed decisions when exchanging foreign currencies.

Have questions about currency pricing?
MCA members are happy to explain rates and ensure every transaction is handled transparently.