¨A nickel ain’t worth a dime anymore.¨
Use Crisp Foreign Banknotes
- In some less-visited countries, you need to make sure that you have local banknote without tears. Vendors and banks sometimes will not accept bills that are not in good condition. With each year, there is less circulation of bills in lousy shape. Most countries are replacing their paper currency with bills made of plastic that do not tear easily.
- If you find yourself in some countries without a lot of tourists and are using US dollars, the banknotes need to be crisp. It may be difficult to find change for any denomination above a $5 bill.
- Try to keep small change especially when visiting Emerging Countries. Vendors (particularly itinerant ones) may not have change for large denomination banknotes. They may have to go searching for change among other vendors. (Note: You may have this problem both with US and local currencies with any banknote worth more than the equivalent of $10). Sometimes (particularly in poorer countries) you may not be able to get change at all. (When this happens, I end up buying a enough stuff to use the banknote).
Typical Problems with Foreign Coins and Banknotes
- Look at the money carefully before accepting it. In some countries, the currency changes frequently. Some unscrupulous vendors may attempt to foist old banknotes that no longer are legal tender on unsuspecting tourists.
- Sometimes countries have old and new currencies. Haitian businesses often quoted prices in old gourdes when I was there in 2014. Until several years ago, there were eight gourdes to one US dollar. Sometime before 2014, the Haitian currency the exchange rate began to ¨float¨. In other words, the currency market determines the exchange rate. The rate changes daily. When I was in Haiti, the rate of exchange was 48 gourdes to one US dollar. Therefore, in the shops that quoted prices in old gourdes, I had to pay six times the quoted price for the items (6 times 8 equals 48) in new gourdes. (Note: Only new gourdes were in circulation). If the price was in old gourdes, I had to multiply the amount by 8 to get the price in US dollars. (Haitian merchants usually gladly accept US Dollars).
- Some countries have an old and new currency in circulation at the same time following a period of inflation. When I was in Poland in 1995, they had both old and new zlotys in circulation. The old zloty was worth 22,000 zlotys to a dollar; the new currency was 2.2 zlotys to a dollar. (A new zloty equaled 10,000 old zlotys). Therefore, if I bought something that was 10,000 old zlotys and gave the vendor a 20,000 old zloty note. I would get back one new zloty or a 10,000 old zlotys bill back.
- The exchange rates and currencies in a few off-the-beaten-path countries can get even more complicated. Some countries have a different exchange rate for travelers and locals. Cuba, for example, has the Cuban peso for locals and the convertible peso for tourists. (The exchange rate for the Cuban peso is at par with the US dollar. Locals use convertible pesos to buy goods from outside of Cuba).
Using Foreign Coins and Banknotes After You Leave the Country
- Avoid having a lot of foreign currency leftover when you leave the country. Most of the time, you will receive horrible exchange rates for foreign currencies outside of the country of origin. On a rare occasion, you may not be able to find any place to make the exchange at all. (Be careful when dealing with “soft” currency. Soft currencies are currencies that investors do not want to buy because they are assumed to be unstable. Hard currencies, those that the currency markets want, are limited, usually to the Euro, British Pound, Japanese Yen, and Swiss Francs).
- You won’t be able to exchange foreign coins outside of the country of origin. If you are not paying attention, you can be stuck with a lot of coins that will be worthless outside of the country. (I occasionally end up with a lot of coins when I leave places, like the European Union and Canada, where the smallest denomination bill is five dollars or Euros. When this happens, I set the change aside and spend it when I return).