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The iPad Index and the NZ dollar

September 29, 2013 Leave a comment Go to comments

iPadMany thanks to Kanchan Bandyopadhyay for this article from the NZ Herald on the iPad index. You will no doubt have heard of the Big Mac index which is an informal way of measuring the purchasing power parity (PPP) between two currencies and provides a test of the extent to which market exchange rates result in goods costing the same in different countries.

Australian trading company CommSec yesterday released its iPad index, which showed that New Zealand was the 26th-most expensive country in the world to buy one. The index compares the price of a 16GB iPad with retina display across 46 countries around the world in US dollars to compare the value of the world’s currencies.

The survey found the following:

* Argentina is the most expensive country to buy an iPad – US$1094.11
* Brazil is second with prices of $791.40
* Malaysia is the cheapest country to buy an iPad US$473.77
* Australia is the fourth cheapest US$507 – NZ$604.87

Ipad Index – NZ$ – Aus$
One New Zealand dollar currently trades for about 89 Australian cents. Comparing the price of iPads, the New Zealand dollar is worth about 83 Australian cents, which would suggest the two currencies are trading at a fair value.

Ipad Index – NZ$ – US$
An iPad in the United States is similarly cheap, costing about US$499 (NZ$595.32) and one dollar in New Zealand is worth about $0.81 in the United States, compared with the current trading value of $0.84.

Ipad Index – NZ$ – Yuan
However, in China, where many iPads are produced, the Kiwi dollar appears expensive. An iPad costs US$602.52 (NZ$719.40), suggesting the two currencies share a similar value. In the current foreign exchange market, the New Zealand dollar is worth about 5.13 Yuan.

Ipad Index – NZ$ – UK
New Zealand’s value against the UK Pound Sterling tells the opposite story, where it costs US$639 ($762.35), five per cent more expensive than in New Zealand. One New Zealand dollar is currently worth a significantly cheaper 52 pence.

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