If the euro goes down because of devaluation will irish deposits in Rabo be devalued?

Discussion in 'Deposits' started by Modestus2416, Nov 26, 2010.

  1. Modestus2416

    Modestus2416 Registered User

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    If the euro goes down and there is a devaluation will irish deposits in Rabo be devalued as I am an Irish resident and not a Dutch National-similarly will euro deposits in National Irish Bank be davalued even though its a Danish Bank with Danish Kroner Guarantee
    If I open a German euro account with German address am I protected more from devaluation because it is German Euro sccount
     
  2. pudds

    pudds Frequent Poster

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    Maybe I'm looking at this too simply... but if the euro is devalued..surely all euro held accounts will have to follow that devaluation regardless of what country their held in.:confused:
     
  3. Modestus2416

    Modestus2416 Registered User

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    Deposits

    Should I now convert euro deposits into Norweigan Kroner or Canadian Dollars to avoid devaluation -I assume the conversion cost will in the long run be cheaper than just leaving the euro to be devalued
     
  4. farmerette

    farmerette Frequent Poster

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    having savings in a rabbo direct account will not shield you from a devaluation were ireland to choose ( or be forced ) to leave the euro , same thing if you have your savings with nationwide uk or ulster bank
     
  5. Troy McClure

    Troy McClure Frequent Poster

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    If these banks are operating accounts in Ireland you may be protected by the government guarantee of thir Mother country but they are punts in the event of a Euro breakup.
    Pudds the issue is Irelands 'new' currency would have to devalue over night due to our financial position. This includes Euro to punt deposits. Most other Eu countries are not in this position so they would not need to devalue.
     
  6. Troy McClure

    Troy McClure Frequent Poster

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    Rabo rep confirmed with me funds deposited with them here would revert to Irish currency in the event of Euro breakup.
     
  7. ajapale

    ajapale Moderator

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    What happened in Argentina with dollar denominated accounts?

    Corralito - Wikipedia


     
  8. Duke of Marmalade

    Duke of Marmalade Frequent Poster

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    This won't happen. But let's hypothecate. We are talking about a situation where the government announces at 12 midnight on a Bank holiday weekend that all Irish deposits and liabilities and contracts and pay arrangements and prices in shops etc. etc. currently denominated in euros should be interpreted as being in punts nua at a 1 for 1 translation but henceforth a punt nua will be worth 50c. So the question is would such a decree apply to Rabo/Ulster etc.? Why should the government extend it to these foreign banks? That is only harming its own citizens who are owed euros by these banks. But it is true that these deposits are subject to Irish law so if it was a blanket decree they would be caught.

    Anyway this is all very silly, it is never going to happen.:eek: Not only is it hopelessly impractical (see above link), it doesn't actually help as it suddenly doubles all our foreign debt in relation to our economy, as we can't extend the decree to foreign jurisdictions. Especially our banks would still owe 170bn real euros to the ECB.:eek:

    Of course the euro itself may well depreciate (not devalue as it is a floating currency) in which case all euro deposits would suffer the same depreciation.
     
  9. manaboutdog

    manaboutdog Registered User

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    What about WHEN IF we realise we have no choice but to default at some point down the line? Wouldn't it make sense then to pull out and devalue?
     
  10. onekeano

    onekeano Frequent Poster

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    I've been buying some Rabo funds since around August which have been doing ok - I presume that these funds would remain in euros even if I'm domociled in Ireland? ie. like buying shares in any stock market the share value would remain the same?

    Roy
     
  11. Brendan Burgess

    Brendan Burgess Founder

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    Hi Keano

    These would continue to be denominated in euro. But their value would depend on where the underlying assets are. For example, if you have a fund which invests in US shares, it would be a good protection against a depreciation of the euro.

    Brendan
     
  12. onekeano

    onekeano Frequent Poster

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    Thanks Brendan - that was what I had thought but I appreciate the clarification.

    Roy
     
  13. farmerette

    farmerette Frequent Poster

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    no ,those funds would assume a new value in line with our new currency , i was told this by a rabbodirect employee , its the very reason i wont invest in any rabbo funds , pity as i really like some of them
     
  14. Erith

    Erith Frequent Poster

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    This is a confusing thread to me at least.

    If you have euros held in a non-irish european bank can someone say with any certainty what the possible outcomes are if:

    1) Ireland leaves the eurozone and reverts to punts but the bank's host country remains in the euro.

    2) The euro ceases and both Ireland and host revert to their former native currencies.
     
  15. G-Money

    G-Money Frequent Poster

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    Looking for an answer on this too folks.
    It seems illogical to me that you invest funds in a Rabo bank a/c, OR fund, which you buy in euros, that they would revert to a putative irish currency in the case of us leaving the euro. I would be of the opinion, that money saved in a euro area fund, stays in the euro, even if your own country reverts to the punt?!?
    The only thing that can be changed is that when you withdraw these funds, they will then convert into the punt. So if you invest €100, we default and leave EMU, I then withdraw IR£200? No, yes?!?
     
  16. minion

    minion Frequent Poster

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    You are correct.
    The value of your shares in the fund will not devalue (assuming the Irish mess not influencing whichever fund you invest in). When you cash in these shares your Euro will be converted to whatever currency Ireland then uses at the then exchange rate.
     
  17. dockingtrade

    dockingtrade Frequent Poster

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    WHat would happen to all Irish domiciled
    Funds keeping in mind Ireland is one of the biggest fund admins in the worl ie base currency euro based in Ireland
     
  18. dam099

    dam099 Frequent Poster

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    To a large extent it's irrelevant what would happen as the underlying assets of the fund are not likely to be converted unless they are invested in Irish assets, if the shares were converted from euro to punt nua their value in punt nua would rise to match the value of the underlying assets. In reality the governing documents may make provision, also bear in mind many funds including Irish domiciled ones have multiple currency classes and are not necessarily denominated in Euros.
     
  19. barrydn

    barrydn Guest

    So realistically, withdrawing your money in Euro now and hiding it under a pillow may be a safer bet than leaving it with an Irish Bank in the absence of depositing it abroad?
     
  20. Guest105

    Guest105 Guest

    Last edited by a moderator: May 9, 2011
    from reading this and other threads it now seems inevitable that ireland is going to default. How soon is this likely to happen, next week, next month, two months???

    or will this be a bit like the property bubble bust, everyone knew or thought they knew it was coming but very few people did anything about it.
     
    Last edited by a moderator: May 9, 2011