How do exchange rates work?
Every country’s currency has a different value based on economic performance, trade balance, and investor confidence.
When demand for NZD increases (for example, if more people are buying New Zealand exports), the NZ dollar strengthens. When demand falls, it weakens.
Banks and currency providers like Travelex buy and sell currencies at different rates, known as the buy rate and sell rate. The difference between them — called the spread — is how providers cover costs and manage risk.
- Buy rate: The rate we use to buy foreign currency back from you.
- Sell rate: The rate we use when selling foreign currency to you.
How to calculate an exchange rate
You can calculate exchange rates yourself using this simple formula:
Foreign Currency Amount × Exchange Rate = Amount in NZD
For example, if the exchange rate for USD to NZD is 1.65, then $100 USD × 1.65 = $165 NZD.
Exchange rates you see on the news — known as interbank or spot rates — are the wholesale prices banks use when trading large amounts of currency. Retail customers pay a slightly different rate to cover service and operational costs.
To see the most accurate rates available to you, visit our exchange rates page.
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Frequently Asked Questions
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What is the best place to exchange money in New Zealand?
You’ll get competitive exchange rates when you order online and collect in-store with Travelex. Online orders come with $0 commission and exclusive rates not available at other locations.
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How does interest rate affect exchange rates?
When NZ interest rates rise, the NZ dollar usually strengthens because it attracts foreign investors seeking higher returns. The opposite happens when rates fall.
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What’s the cheapest way to convert currency?
Buying your foreign cash online in advance — or loading a Travelex Money Card — helps you lock in the best rates and avoid last-minute airport markups.
Learn more with our Best Tips for Buying Foreign Currency.
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How to calculate exchange rates yourself?
Use the exchange rate formula above or try our Currency Converter for live, accurate conversions.
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What is a spot rate?
The spot rate (or interbank rate) is the price banks charge each other when trading large amounts of currency. It’s not available to retail customers but helps indicate overall market value.