Majorly different currency exchange rates at different banks?

I do realise that different people get slightly different currency exchange rates at different places, and that some places offer slightly better rates than others, but what I’m seeing today really doesn’t make any sense.

Icelandic Central Bank: 1 Euro = 131 ISK
Glitnir: 1 Euro = 196 ISK
Kaupthing: 1 Euro = 173 ISK
Landsbankinn: 1 Euro = 195 ISK

I know the Central Bank is trading at a “fixed rate”, but how can it differ so much between the others?

Anyone have an explanation?

Is it the difference between retail and wholesale rates? Does the Central Bank sell to individual consumers at that rate? Do the other banks at those rates?

That would describe the major difference between the central bank and the commercial bank rates.

But the difference between the Commercial banks escapes me.

Glitnir and Kaupthing now show a similar exchange, at around 165, while Landsbankinn show a page-error :slight_smile: So I’ll just have to wait and see how it sorts out.

Those three are the only major players that do international dealings. The rest of the banks are pretty much owned by those three.

Well, given that I can get USD at about 3% exchange rate from a money machine at Yonge and Bloor in downtown Toronto, but if I go to the airport, I have to pay around 7.5%, the difference in rates may just be “because we can”. And maybe the one bank has different internal efficiencies and can get away with charging a different rate. How quickly are these rates changing, as well?

That’s the same here.

But these are the official rates they give on their homepage - which makes it very odd.

And the difference between buy/sell is totally out there, as you can see:

Kaupthing
Glitnir
Landsbankinn

And btw, Kaupthing is down to 151 now.

How are people supposed to be able to do business in this climate???

(they can’t, which is why I’m spending my day on the Dope instead)

Is it just me, or do “Glitnir” and “Kaupthing” sound like swords out of a Tolkein novel? “The Orcs retreated as Gandalf and Aragorn advanced down the tunnel, Glitnir and Kaupthing held high.”

I’m wondering whether this is like when the Canadian dollar was rising very rapidly compared to almost everything else about 9 months ago: people back off and become cautious until the rate of change slows down and they can figure out what is going on.

Sure sounds like a similar situation, for the general public (since the fundamental reasons are very different).

As for the names, Tolkien did lend from Norse mythology and Icelandic is pretty much the same language it was a 1000 years ago. As for the “held high” parts - maybe not :wink:

I see a business here :smiley:

Looking at those numbers, I’m wondering not so much about the “why”, but the “how”. Obviously each bank will have a slightly differet rate both ways, so they can make a profit, but even if it’s the exhorbitant 7.5% difference you find at the airport, those rates are way too far apart. If I can go to Glitnir, give them a euro, and get 196 ISK, and then head over to ICB and give them 141 ISK in exchange for one euro (assuming a worse rate because I’m trading the other way), I’ve still made 55 ISK on the transaction, for minimal effort and no risk on my part. And then, of course, I can take that euro I got from ICB and take it right back to Glitnir, and make money hand over fist. In any sane economy, effects like that should stabilize the exchange rate long before it got that different. So how did they get that far apart?

The thing is - it’s only the sell rate that’s differed so much. They’re all buying at around 131.

So that beautiful business deal doesn’t work (which is why you didn’t see me running between banks today shouting - SWEEEEET).