British Pound to NZ Dollar Exchange Rate
At the date of updating this report (End August 2011) the NZ Dollar was strong compared to the GBP at 0.516. The chart below shows the comparative exchange rate for the last 2 years.
Over this time the GBP to NZD exchange rate has ranged from a low of 0.34 in Sept ‘07 to a high of 0.47 during February 2010. This is a 28% difference and can have a big effect to the final amount of NZ Dollars you get in your pension transfer. The 10-year average exchange rate is 0.345.
For Example assume you have GBP100,000 of pension funds to transfer.
At an exchange rate of .034 this is NZ$294,117
At an exchange rate of 0.41 this is NZ$243,902
Difference NZ$50,215
Now this is an important point to understand. The NZ Dollar is a very heavily traded currency on the international currency markets and the exchange rate is very volatile. This makes it impossible to predict the exchange rate on any given day and to pick the future highs and lows of the exchange rate range.
The example of NZ$50,215 differential has been made by selecting two extreme points in the rates over the last two years. In practice this is unlikely to happen. However by being aware of charts such as that shown above and the long term average rate you can make a judgement on whether or not the exchange rate is in your favour in a general sense.
There are many other factors that come into the decision to transfer your pension to NZ, but if you have the time, and depending upon the current exchange situation, it may pay to wait until the exchange rate is in your favour be fore converting to NZ dollars. The dollars involved are significant.
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