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Another bad year for the pound, as it drops against two-thirds of currencies
If this year’s holiday feels distinctly pricier, there’s good reason for that: over the last 12 months the pound has dropped against 40 out of 60 currencies, according to research.
However, this was better than last year, when the Brexit effect saw the pound drop against 56 out of 60 currencies. The Zambian kwacha and the Iceland krona were the best performing currencies against the pound, rising by 14%. The Mozambique metical (11%), Russian rouble (10%), Serbian dinar, Poland’s zloty and Hungarian forint (all 8%) have been the next best performers.
The worst performing currency in the past year was the Egyptian pound, which has fallen in value against the pound by 100%. The Egyptian pound was devalued towards the end of 2016 in order to stabilise the economy. The Turkish lira and Argentine peso were also weak, dropping by 17%. Lloyds Private Banking which conducted the research, said security fears and a slowing economy, including high inflation, have helped drive the Turkish lira lower.
Those who like their long-haul exotic holidays will find their money goes further in Sri Lanka and Malaysia where the rupee and the ringgit have fallen by 5% and 4% respectively since July 2016.
However, most holidaymakers will see rising costs. The pound has fallen 6% against the euro, with stronger economic growth in the Eurozone sending the currency higher. It is largely unchanged against the dollar. The pound has also fallen against the Australian dollar, Mexican peso, Indian rupee and Canadian dollar by 5% to 5.5% in the past year.
Peter Reid, expatriate banking director at Lloyds Private Banking, said: “Sterling has had a very mixed performance over the past year. Understandably the pound has appreciated against those economies that are facing problems, especially high and persistent inflation such as Egypt, Uzbekistan, Turkey and Argentina.
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“UK travellers going on long-haul destinations, such as the Philippines, Sri Lanka and Malaysia will have benefited from the further strengthening of the pound. However those going to parts of South East Africa and Eastern Europe won’t see their money go far.”