Exchange rates and the Wizarding economy (was:Lockhart - Magical Ability & Wands

[Catriona]

No: HPFGUIDX 24304

Robyn wrote:
> I'd love to know the Gringotts exchange rate 
> for Muggle and Wizard currency - I wonder whose
>  economy is stronger?

Catlady replied:
>JKR said that a Galleon is worth five pounds (about seven dollars). I
>don't believe it: a look at the prices that Harry pays for things
>suggests that the Galleon is worth something from $25 to $40 in 
>modern money.

I've just done a few calculations based on the price on the back of 
the UK QTTA where we are given that the price £2.50 equates to 14 
Sickles 3 Knuts. 

We know (PS p58) that 1 Galleon = 17 Sickles and that 1 Sickle = 29 
Knuts.

Because 14S 3K = 409 Knuts = 250p

We can calculate that:

1p = 1.64 Knuts
£1 = 162 Knuts = 5.58 Sickles =  0.32 Galleons

We can now estimate the value of Wizarding currency in terms of 
Sterling (based on the exhange rate at the time of QTTA's 
publication):

1 Galleon = £3.04
1 Sickle = 17.85p
1 Knut = 0.62p

(Apologies for any rounding error)

If I have time later I might even calculate an optimal exchange rate 
for Gringotts.

I am working on a detailed analysis of the wizarding economy to 
illustrate just how it can function effiiciently [Don't worry, I'm 
not really insane, this is useful revision for my MSc]

Catriona