Should I change some Euro into US Dollars?
Replies: 12 - Last Post: Jul 19, 2012 3:43 AM Last Post By: avsfan
Jul 18, 2012 1:35 AM
Should I change some Euro into US Dollars?Are US Dollars sometimes necessary for visiting Peru?
Does it make sense to change a slight amount of Euro into US Dollars before leaving?
Or I'd simply better changing my Euro directly into Soles (when in Peru)?
Jul 18, 2012 3:26 AM
1Check this page, which seems to give good advice about changing money in Lima.
This seems to be very positive about just using Euros to convert to Peruvian currency in Lima. So, no...US dollars are not necessary, but may be financially more beneficial.
However, remember that the difference in buy-sell rate for US dollars is always smaller than other currencies around the world, especially in latinamerica. This is because the US dollar is still the universal currency and worth proportionately more for real currency exchange than other currencies. This means that very often you save money by converting your local currency like Euros into dollars in your home country, and then converting the dollars in to the local currency of the the country you are visiting (in this case, Perú Nuevo Soles)
You are from Italy, so look at the current exchange rates in Milan.
100 Euro=144.59 US
100 Euro=394.88 Peru NS
100 US= 273.1 Peru NS
Now, look at the current exchange rates in Lima: http://www.exchangerate.com/currency-converter/EUR/USD/1.00/?XR-200Plus_Converter=convert&calc_short_from_iso=266&calc_short_to_iso=239
100 Euro=323 Peru NS
100 US= 283.8 Peru NS
100 Euro= 122.6 US
Therefore, you do not have to be a mathematical genius to figure out that your best option is to buy US dollars in Italy, and then converting the US dollars into Peru NS in Peru (even taking into account the built-in fees for double exchange). Your second best option is to buy Peru NS, as much as you think you need, in Italy. The reason is that in practical exchange terms (not the flat equivalencies shown in straight conversion sites like XL), the dollar is always in demand and worth more than other foreign currencies. Euros may be accepted, but they are just not as much in demand, especially in Latinamerica.
US dollars are also:
1. More useful for exchange in neighbouring countries.
2. More beneficial in many shops/hotels/restaurants (especially in countries with foreign exchange controls like Argentina and Venezuela, and for countries like Chile where the law allows for not applying sales taxes for foreigners using US dollars with a foreign passport in some circumstances, or if you go to places like Eucuador or Panama where the US dollar IS the currency).
3. Regardless of what anyone says, dollars are always more recognizable and accepted in most countries, especially in Latinamerica.
For this reason, GENERALLY the best strategy for financing your travel costs anywhere within Latinamerica is to use a combination of debit cards for ATM's and as many American dollars as you are comfortable carrying (the latter especially for Argentina, Venezuela, Panama and Ecuador). A good strategy if you are intending to stay in a primary location first for acclimatization (ie: a few weeks in an apartment or a language school) is to bring US dollars and spend them on these things first, so you are not carrying as much US cash with you as you continue your travels.
Many posts here are now advising against using credit cards generally due to possibility of mischarging, and the increasing trend in use of intermediate credit institutions (like the terrible Transbank in Chile) which puts further distance between the commercial vendors and your home credit card provider, causing increasing problems with resolving issues caused in visiting countries. Therefore, I recommend only using credit cards for where you have no other choice for things you really want or need, or for emergencies .
Jul 18, 2012 7:28 AM
2Currently with the crisis of the Euro and the devaluation referring to the Dolar, you get slightly less when changing Euros generally in SA. If it is worth or not to change first Euros in dollars and then this into southamerican currencies depends on how the crisis will continue.
These things change very quickly. For example some months before the black market in Argentina was practically non existant or at least the difference of the exchange rate was very low. Today it is close to a 50%.
Personally I had never problems with using credit cards in SA, at least not with mischarging but of course you also have to use common sense where and when to use your credit card.
Jul 18, 2012 8:36 AM
Jul 18, 2012 9:40 AM
4Yes,just using the ATMs to withdraw local currency is good over 90 % of the time, but sometimes working ATM's are not always accessible as many posts here attest to. Also, they sometimes run out of money for periods of time, especially holidays or long weekends.
As I said before, you do NOT "NEED" Us dollars, you needn't use them at all, but are handy and often give you a financial advantage. Bringing Euros to exchange or even use is just fine and less work than going to an exchange house at home , you just may not have as full convenience and you will not get as much financial benefit.
Even before the Euro crisis, and when the Euro was a lot more solid than the US dollar, the US dollar has ALWAYS gotten far better exchange value in Latin America than the flat one-to-one rates suggest. That has been consistent since the Euro came out (I have been living in LAmerica since before the Euro came out).
And, there have always been a flourishing black markets, either on the street (more risky) or in unsigned offices here in Argentina , especially for dollars (I was using an established officer one one before currency control, now busier and a lot more selective about their customers), but it is just even more flourishing now.
Jul 18, 2012 10:54 AM
5mendocinateacher - your advice about EUR and Peru is false.
There is no a chase you will get better rate than visa / mastercard fx, (mastercard can be checked on xe.com), as its's very close to interchange rate - only banks and big money brokers can access this rate.
Most of banks add 2.5% on top, but if you find one that doesn't you save fair amount of money and you add convince of having them directly from the ATM.
Exchanging EUR to USD to exchange them to PEN is the worst thing you can do.
It makes sense only by speculative mean eg. if you are sure that EUR will fall against USD and other currencies, than you can save money by changing it before it does. But it's hard to predict, if you change EUR into USD and EUR will rise you will loose money.
OP needs foreign exchange fee free debit card, that's it. EUR can be also changed in any casa the cambio in Peru, but ATM offer better rates if you follow my advice
Also exchanging EUR in major cities of Peru doesn't bring more losses than double exchange to USD and then to PEN
Remember than you are never getting interchange rate, you always loose on transaction, besides that this operation carry risk of USD devaluation I've mention above
And last but not least - what applies to Argentina, doesn't apply to Peru. Peru is not hard currency thirsty like some other countries, it's own currency has been stable and strong among financial crisis.
as you can see it's actually growing against USD
Edited by: ban_janti_return
Jul 18, 2012 11:41 AM
6I was not giving advice, I was giving some facts and some opinions in a non-arrogant way. I am just a lowly old Argentine-American English-teacher lady, who has experience travelling and living in Latin America for most of my long life, over 40 years of experience here, now living and teaching English to locals in Mendoza. I have no agenda. I just like to talk about travel, with the many people I meet on the road and here, and share real experiences between classes or travelling on the buses .
These exchange rates are rates that include built-in fees. I just provided current examples of what you can get at exchange houses in different countries, no more, no less. xe.com is just a flat rate, that has little to do with any real exchange, whether it be with credit cards, ATM's or cash exchange. It just gives you an idea of relative international values, very often misleading.
Yes, the strengths of various currency rates always vary, but the US dollar has always been relatively strong everywhere in Latin America for practical exchange purposes. At least it has been for the 40 years since I was an eyewitness. The Peru NSole is a strong currency at the moment, so what? The Euro was much stronger than the dollar for many years, but the strength did not reflect real exchange practices on the ground against the dollar at anytime. It did make the purchasing power of the Euro earner higher for certain periods of time, but that is a completely different issue.
ban_janti_return, you know that I am not one to be tangled into your incessant and querulous arguments. It would just be interesting to know exactly what you do and where you live, as you seem to be promoting luxury travel while at the same time trashing people who have long and good experience. You come on in April, 2012, with no apparent prior posting experience, and suddenly you amass over 1,000 posts by lording it over everyone else, often without any real experience of many of the places you purport to know so much about. What is your motivation, with respect? What account names have you had before, and why did you suddenly change in April? I can make an educated guess given your demeanor.
Jul 18, 2012 11:59 AM
7Currently the only thing that I can affirm is that in many places you get now a better rate for Dollars than for Euros. I noticed it even in Turkey where I have been recently. The Euro has fallen in the past months quite a lot in reference to the US Dollar and it is logical that specifically in Southamerica people don´t want to loose money while changing. In some cases you get a better rate even considering that you loose some money while changing Euros into Dollars in Europe. Of course it all depends when you are going to use that money and nobody actually knows if the Euro will continue with devaluation, remain or even gain again with the US Dollar.
Jul 18, 2012 1:17 PM
8#6 I don't know why you see my practical advice as a personal attack. I've had EUR account for a time I've lived in Europe and I was using it in many South American countries, including Peru. I'm talking from experience, the best financial wise tactics to get best value for your EUR is to have no fx debit card.
My intention is not to argue with you, as you provide valuable insight from inside Argentina, just to correct you for the benefit of OP and other Euro travellers to Peru.
When you use your visa or mastercard, it doesn't matter how much demand is on the local market, the only thing that matters is a interchange course set by forex market. You have direct access to it by using this card and that's how you avoid dealing with a middle man.
If my post sounded arrogant I apologise for it, this was not my intention.
I've changed an account after a war with William/Beerfree, we were both banned. I hope this will not happen again, it seems that we larner to get along in civilized manner, am I right Beerfree? ;-)
I agree with your and #7 observation, EUR CASH usually gives you poorer rate than USD CASH, but I'm talking about cashless translations. I hope it's clear now and there is no hard feelings anywhere.
You are wrong. Xe.com uses exchange rate table of mastercard, you can compare it if you google it. By using fx free card you have direct access to those rates, I've had one from Citibank when I've travelled and my statement was always exactly like rates you'll find on xe.com
It means little demand for hard currencies, as there is no necessity for it like in Venezuela or Argentina.
In piratical terms it means that casas the cambio are using interchange fee with marginal spread, as they are not making money on collecting hard currency, they are only making money on the spread. So it doesn't matter for them if they buy and sell eur, usd, chf, gbp etc...they are not holding to it, they trade it back.
Hope that's clear.
I don't promote any type of travel, I advise from my experience, and it's mid-range traveller experience, far from luxury.
Second part of the sentence is pure nonsense.
I have real experience about every place I talk about, if I don't I always say so.
I haven't been in winter in Mendoza if that's you problem, but I've said it. And I also said that the cold I'm referring to is according to data in the internet and I've given you priority to make the judgement, as you live there.
For my dislike of the city itself it's my personal opinion and I'm entitled to it.
Any other questions about me? Probably would be better to ask them by PM not to spam on this topic.
Edited by: ban_janti_return
Jul 18, 2012 1:42 PM
9On my last two trips to Peru, I have never needed dollars. The local currency can be used for every pourpose. The Peruvian Sol has not lost value since the year 1993, and even gained value against most foreign currencies recently, including the Euro. Locals used to prefer dollars but this was in the 1990's, and the use of the US dollar as "hard" currency for larger transactions (buying flight tickets, paying for tours) was gradually abandoned.
Some airlines, tour operators and souvenir shops still accept payment in dollars but often at unfavourable rates. Euros are easy to change at monechangers because they are seen as the safer currency (less fakes, less deteriorated bills).
Dollars are still the most easy of all currencies to change, but if you have Euros there is no need to use them as intermediate currency.
Jul 18, 2012 1:48 PM
10#9 Very true. Airlines still quote in USD and some hostels have their rates in USD, but they are more than happy to accept PEN. I don't know why they still do it, it seems more like a custom than a real need.
PEN has been getting stronger to USD as I've shown on the graph in above link, it has been virtually unaffected by a crisis even when big currencies like BRL dropped
Jul 19, 2012 2:15 AM
11Anyway, if one does bring US$ or Euro notes, make sure that they are crisp, clean and undamaged. Not the slightes tear. Preferably new. People, businesses, banks and exchange offices can be very difficult about this, because the Peruvian central bank is.
Jul 19, 2012 3:43 AM
12Be forewarned. Agree with 11. I wouldnt even bring dollar bills because even a slight fold in them will mean they will either not take them or they will exchange them for a lower rate. It got to the point I just returned to the USA with the dollars I brought there and used an atm for all transactions while I was in Peru, It was much easier
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