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# Calling all mathematicians: currency conversions

We will be travelling to Turkey and can receive discounts at many hotels and on many tours by paying in cash with either Turkish Lira or Euros. We are from the U.S.A. I think the best exchange rate is to purchase the foreign currency at home through my bank (Bank of America). I will be purchasing both Turkish Lira and Euros for my trip. What I need help figuring out is if it is better to exchange US dollars to Turkish Lira for cash payments or exchange US dollars to Euros... I realize this will depend on the exchange rates but I was wondering now, assuming today's rates, if it makes much difference. We are only talking about \$2000. I have no idea what Turkish Lira to Euro rate they will use in Turkey but many rates are posted in Euros.

Thanks!

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"I think the best exchange rate is to purchase the foreign currency at home through my bank (Bank of America)."

You 'think' wrong actually. Buying currency from your US bank (BofA or any other bank) is just about the worst/most expensive way to get euro/lira. Just leave the \$\$ in your checking account and use ATMs to get cash. Even using exchange booths in Turkey would be better than buying at BofA.

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From experience in other countries, prices may be quoted in euro, but at payment you will be charged in the local currency, converted to euros if you wish. We always ask that quotes be given in local currency. I'm pretty sure the exchange rate from the Turkish lira to dollars will be better than the exchange rate from euro to dollar. We always use the local currency. Use ATM's for your cash needs.

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In the tourist regions, you can exchange \$ or € in cash at many exchange booths for virtually no fees at all!!, at an exchange rate that almost equals getting cash from an ATM.

Merchants take € or \$. \$ usually at a rather bad rate 20% worse than €, because Russian tourists only have \$ and pay whatever is asked, German tourists don't. Food outside of hotels and supermarkets are to be paid in Lira only. The best hotel rates are offered with German or Dutch package tours, payable in €. A week in winter all incluive incl. Flight 4* hotel can be bought at around 150€. If you want hotel only, try www.its.de. If you want it with a flight from Germany, try i.e. www.abindenurlaub.de

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Food outside of hotels and in supermarkets are to be paid in Lira only.

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In the tourist regions, you can exchange \$ or € in cash at many exchange booths for virtually no fees at all!!, at an exchange rate that almost equals getting cash from an ATM.

I hope this is true because in the past one way these "exchange booths" have made their profits was by charging little or no "commission" and then exchanging money at a very poor exchange rate and one that was highly in their favor.

I may be incorrect but I would stick to using an ATM rather than any "exchange booth" anywhere including in the US unless I had absolutely no other choice.

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"I have no idea what Turkish Lira to Euro rate they will use in Turkey ..."

Just google "currency conversion", then click on the link to OANDA (http://www.oanda.com/currency/converter/), select "EURO" on one side and "Turkish Lira" on the other side, this will give you the interbank conversion rate between these two currencies. Down below you'll also see different rates for buying and selling, and a grid of rates for MIN, AVG, MAX between Bid/Ask at that moment, or however accurately the site can reflect the real market flunctuation.

I would withdraw Turkish Lira from local bank ATM against my US checking account to pay for expenses in Turkey. That way I won't have to carry large amount of cash, and will be sure to get a fair conversion rate from USD to TRY.

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Oops, the ending paren gets tacked on to the web address. Please remove the ending paren ")" from the link to the OANDA site. It should be
http://www.oanda.com/currency/converter/

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First just some general information:

The exchange rates in the free market in Turkey and specifically in Istanbul, to and from any currency, changes almost by the minute, and is posted on numerous internet and bank sites every 15 minutes.

The Central Bank posts a daily fixed rate which is used mainly for accounting puprposes.

Unless there is some local or international crisis these rates do not fluctuate drastically in the short term. i.e. the Euro gained 2.4% against the TL and the \$ lost 1.3% last week.

Exchanging at merchants and at hotels is invariably the worst thing one can do because they do not have the ability to convert to TL immediately and will have to wait for the next day, which means that they will be taking a FX risk. Hotel or shop owners or managers will not allow front desks or cashiers to take this risk, therefore will allow them to use a rate that will cover their backs and some.

Banks have large overheads and wish to recover through margins, commissions and charges so that even if their posted rates may be fine, what you get will be less.

Small exchange offices give rates depending on their proximity to the local clearing center and their deal making ability with the clearing center as well as their overheads and locations.

The exchange offices have no commissions and no hidden fees. You get what is posted.

Outside Istanbul and in the very touristy areas of Istanbul make sure you count your money carefully and do your calculations yourself also.

If you are exchanging only a couple of hundred USD, the one percent or so difference in margins is not worth the bother to try to find a location with less margin between selling and buying rates.

Information Particular to Istanbul :

Best exchabge rates are at following locations because these are almost central to the free market currency clearance exchange :
- Below Nuruosmaniye mosque area just outside or just inside the Grand Bazaar
- Mahmutpasa Street
- Tahtakale

Sultanahmet, Sirkeci, Eminonu, Spice Bazaar, Taksim, Nisantas, Besiktas, Gayrettepe, Levent, locations have higher margins.

You can negotiate for slightly better rates if exchanging morethan \$3,000 or so.

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I forgot to add that one of the web sites for checking all current rates is www.doviz.com

and that the local FX shop rates will save you anywhere from 2010% over any rates you will get in your own country from a bank, PTT, Western Union or whatever.

and, the airport exchange offices do not have good rates, which makes getting TL with your debit card from an ATM at either of the Istanbul airports a better idea.

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To add a complication: some banks charge a fee for withdrawals from non-partner banks abroad (BofA for one). If there is time, the OP might want to open an account with a bank or credit union--the latter might be easier to find--that does not charge fees and uses the posted rate for ATM withdrawals.

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Jill02, don't be fooled if Bank of America or any other US bank that tells you they have no fee for currency exchange. Even if they don't charge a big flat fee you can bet they will calculate a huge mark-up into the exchange rate. The worst plan you can make is to buy your currency from a bank at home. Listen to the good advice above and enjoy your trip to this magical country.

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Thanks everybody! It is now very clear that Pre-buying currency at home is not the best way to go so we can put that issue to rest.

It was helpful to hear that I will be charged in Lira even if they advertise prices in Euros (then convert to Lira at whatever rate?). So I will plan to take out Lira and pay in cash when I can although I doubt I can take out enough to cover a 5 night hotel bill. That's what my credit card with zero foreign transaction fee is for, right?

So, ATMs it is. We have an account at Bank of America and an account at the Contra Costs County Federal credit union. Any tips on figuring out which ATMs to use without incurring fees?

I don't think I need to know much about exchanging US cash for lira because I won't bring much US cash.

After Turkey, we will be withdrawing Eurosmin Athens and then Kuna. I am hopeful I can exchange any leftover lira into euro or kuna in those countries...

Making sure everything is in order before I get over there!

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Jill02, whenever I have traveled I always get dinged the ATM fee for the foreign ATM but not by my bank. It's something like \$2-4. So the best thing to do is when you do make a withdrawal, get the maximum. And your credit union card is the one you should use, because they won't charge you on top of what the foreign ATM does.

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http://www.flickr.com/photos/mksfca/sets/72157623717915043/show/with/4526262889/

Foreign banks usually do not charge any fee, at least not in Europe. Free standing ATM machines might charge if they are not affiliated with banks.

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I always get dinged the ATM fee for the foreign ATM but not by my bank

Foreign banks usually do not charge any fee, at least not in Europe. Free standing ATM machines might charge if they are not affiliated with banks.

I do not know how the reference to my pictures occurred.

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change any TL left unspent in istanbul to Euros before leaving Turkey. You will get a better rate than anywhere outside Turkey. If you can, use a FX office at one of the areas I mentioned.

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otherchelebi.

are you saying better than this rate (as of the time posted)?

1 US dollar = 1.7963 Turkish Lira

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Michael,

You did not say whether the rate you gave was buying or selling rate and whether it was not or gross.

The market rate at 17:59 today at Dovoiz.com which usually reflects the market was :

1USD = 1.789TL selling USD

There was no additional commission or fee. 1.799 bought you \$ with your TL or ONE USD bought you 1.789TL.

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There are many exchange booths in lots of countries that do have as good a rate as a bank or around 3 pct, for example. They do make money on their exchange rate, but they have extremely low overhead and can make a profit on that. I've encountered that in various countries including Mexico, France, the CR and England, in fact. They often offer better rates than banks because that IS their business and they have low costs.

So there are no rules, just look at the rates/fees and figure it out. I think that may not be so easy for the OP, though.

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Jill02, call your bank and your credit union and ask about international fees (aside from any "foreign" ATM charges). My bank charges a flat 3% fee + any ATM charges for all international transactions. My credit union charges nothing other than ATM charges. So, when we travel internationally we always use the credit union ATM. (And, of course, you should investigate your credit card international surcharges; Capitol One famously has no international fees, but if you don't have Capitol One and don't want to go out and open up another credit card account, call each of yours to see who has the best rate.)

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"have as good a rate as a bank or around 3 pct,"

What exactly does that mean? My Capital One account charges no foreign conversion fee and no ATM fee, so I don't see how a bureau de change is going to beat that.

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otherchelebi,

The rate is then comparable (I googled \$1 equals turkish lire, which gave me the rate I quoted). But do the exchange bureaus accept anything but cash? And if they accept credit cards, is it worth the interest on the loan? I suspect that for tourists, the no fee ATM card is the way to go.

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Michael,

all the rates you will get on any internet site will be spot rates and will have to be based on cash or bank transfer at that moment. These rates change by the minute depending on interntional supply and demand at over one hundred markets as well as local deals.

by the way, i mis-typed the site above. It should have been, www.doviz.com. This site also gives current gold prices in TL and can be a good basis for buying gold jewellery at the Grand Bazaar in Istanbul because you can find 18, 22 and 24 carat gold values there.

There are shops on your left as you go up towards Mercan from the Golden Horn which sell small digital jewellery scales. Buying a reasonably priced one can be a good idea before going to the Grand Bazaar for pure silver or gold items.

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all the rates you will get on any internet site will be spot rates and will have to be based on cash or bank transfer at that moment. These rates change by the minute depending on interntional supply and demand at over one hundred markets as well as local deals.

No argument there, and that will be the rate that I will get out of an ATM machine. When I transfer money to Europe with www.xe.com, I have one minute to decide if I accept its conversion rate or not.

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