Cyprus-Forum.com

[bill cobbett]

Can I put this puzzle to members for checking?

Let's say someone wanted to convert one pound sterling to £CY.

One day last week the page for foreign currency transactions from BoC(UK):- http://www.bankofcyprus.co.uk/currency.asp, gave a note exchange of £CY0.8467 to £1 sterling.

Would you then agree with the following, that for notes:-

You would have got £CY0.8467 for £1 for a direct conversion? Less say 2% commission = £CY0.83 in notes/coin in your hand.

Here is the question, would you agree that you would be better off changing into Euros as a middle stage thus:

On the same day for £1 according to the the UK BBC site "travel money" you got 1.4260 Euro for your £1 sterling, without commission taken into account.

So you now go with your E1.426 to the BoC(UK) and they will give you 1.426 divided by 1.5667 (BoC UK - Euro notes sell / buy rates on the same day) = £CY0.91 but given you have gone through two exchanges, let's say the commission is doubled at 4%, you end up with £CY0.874 . A benefit of nearly £CY0.03 over the one stage process.

Can it make sense that you are better off going through the intermediate stage? Where have I gone wrong? Surely I've gone wrong somewhere?

[devil]

You have to compare bank note exchange to bank note exchange and not to forex currency exchange. Work out how many Euros you will receive in your hot grubby little mitts for your quid, then how many CYPs for your Euros. Currency exchange (e.g., SWIFT transactions, bank transfers) are always more favourable than bank notes and you will never get the forex currency rate it hard cash is involved at either end of a transaction.