Problems with the Pound

One thing I’ve noticed with my recent credit card bill is how much more expensive everything is getting here. I am employed by a UK company and paid (a very small amount each month) in Pounds into a UK bank account. The thing is, since I got here the exchange rate against the Euro has gone into something of a decline.

When I left the UK, I was getting roughly €1.45 to the Pound. Speaking to guests who flew out at the weekend, they struggled to get €1.22. This may not look like too much when you view the figures that way around, but reversing them gives you 1 Euro going from being 66p to 77p in the space of a few months. This essentially means that everything is 10% more expensive to me than it was when I arrived. That is a hell of a jump.

It’s something you have to bear in mind if you head to a foreign country, especially over the long term. Had I been working in the US about two years ago, and getting paid in the same fashion, I’d have been laughing as my pay would have been buying me more and more each month. Sadly, things have gone the other way. Sometimes it’s worthwhile paying up front for stuff. After all, anyone paying a deposit on a French holiday 8 months ago and then having to cover the balance recently would have paid 10% more (were they being billed in Euros) than if they’d coughed up all the money in the first place.

Currency conversion is a minefield, and one I didn’t really pay much attention to when I started travelling. I do remember one friend telling me a story very much the other way around. Many years ago, he was holidaying in – if I recall correctly – Indonesia. Their currency collapses very literally overnight. He and his friend went to bed backpackers with a few hundred pounds in a moderately cheap country. They woke up millionaires.

Their major problem was finding anywhere that had enough hard cash to change their traveller’s cheques. They ended up giving enormous tips to the waiting staff and taxi drivers as there simply wasn’t enough small change anywhere.

I’m just glad this currency slip has occurred mainly after New Year. My bar tab was ridiculous and it would have hurt even more at the current exchange rate!

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