Having tourists in town don't half change the things you get to see. For instance, I wouldn't normally go near a money changers at City Centre.
So get this. According to Al Ghurair Exchange, the English and Scottish pounds have different exchange rates!!!
If anyone could explain, I would be deeply indebted. If the explanation is something along the lines of 'It's because we all live in a madhouse', then don't bother - I've been there myself.
I'm looking for something beyond that... like a real explanation of why the same currency trades at two rates... I'm sure there must be a way to make a killing out of this...
10 comments:
are there different notes issued in england and scotland? like how the euro has different notes printed by different countries?
This is very strange. They buy it at a diiferent rate and sell it at the same rate. The only explanation I have to this is that, all banknotes in England are printed soley by the Bank of England. All the currecny in England for 5 pounds to 50 pounds have the Queen's head on them.
In Scotland, three institutes print the notes, Bank of Scotland, Royal Bank of Scotland and Clydesdale Bank. English currency is rarely seen in Scotland.
This doesn't make sense though, Scottish notes are acceptable in England and vice Versa without anyone ever mentioning anything about paying and extra 1 or 2 pounds.
However the Royal Bank of Scotland still issues 1 pound notes, they do not produce coins. The Bank of England only produces coins. Maybe thats why.
I'm confused now, thats it. Back to the mad house for me.
Well spotted Alex, I've never seen Scottish currency listed in an exchange anywhere.
Making a killing trading between Scottish and English pounds, now there's a wheeze!
When I lived in Scotland I never once had a problem paying with Bank of England pounds, but I had problems more than once paying with Scottish pounds in London.
Money changers pay less for currencies that they might have tough time selling. If every customer who wants to buy pounds would accept Scottish pounds then the rate would be the same, but so long as there are people who would reject Scottish pounds and insist on BOE pounds, the rate for the Scottish pound would be lower.
I note that while the buy rate is different, the sell rate is the same, so no arbitrage for you Alex unless you are willing to buy loads of Scottish money here at a lower rate and sell it somewhere where all sterling attracts the same rate. Even then the money changer's commission could wipe out the small spread and you also run the risk of small movements in sterling eating up your profit.
I did hear once from a local bank that the difference had something to do with Scottish (and Northern Irish) notes having to be redeemed twice, once with the issuing bank and once with the Bank of England. Don't know if there is any truth to that.
*sigh*
What kind of world is it we live in where the anonymous answers make the most sense?
Knights will be roaming the streets saying 'Ni' to defenceless old ladies next...
Noe ye great suthurn jessie, its cuz weer pure dead betterer than yoooz namby pamby Inglush twats n'at eh. So ut izz. No whit ah meen right?
translation, s'il vous plait..
The only other way to make money out of this would be if you were Scottich and already sitting on a pile of Scottish cash (an oxymoron; any loose cash being immediately spent on Irn-bru), and exchanged it in the UK for British pounds before exchanging at Ghurair and buying Scottish pounds again. (For the Irn-bru.)
No whit ah meen, right?
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