Money in South America
If you’re heading to South America, along with budgeting your trip, you should learn about how money works in the continent. There are a few peculiarities that we’ll get to. In this article we’ll take a quick walk through what to expect in each of the ten republics of South America.
First of all, if you are bringing money to exchange, it is by far the best idea to bring US dollars. Although “casas de cambio” or exchange houses, will normally change euros and pounds, you will get a better rate with dollars. Casas de cambio can be found in almost every major city of South America. Be forewarned that the financial picture in Argentina and Venezuela is rather complex right now due to certain political and economic policies.
The currency in Colombia is the Colombian peso, typically abbreviated as the $COP. Also, bear in mind that in Spanish the period symbol replaces what we normally use a comma for in English. So, for example, 5,000 Colombian pesos would be written $5.000 COP in Colombia, or just $5.000. Over the past five years, it has consistently stayed in the $1.800 to $2.000 to the dollar range. In fact, it has been something of official government policy to keep it around $1.900.
Colombian bills come in denominations of $1.000, $2.000, $5.000, $10.000, $20.000, and $50.000. If you bear in mind that $2.000 is roughly a dollar, you will do well, and find it hard to get ripped off.
Colombian coins come in denominations of $50, $100, $200, $500, and now $1.000 as well. Keep in mind that there are two kinds of coins in circulation: the old coins, which are larger, and the “new” coins, which the government introduced in 2012 to reduce the amount of metal used in coins. While a pocketful of coins would once get you a nice meal in Colombia, you will quickly find that coins do very little good in Colombia, especially in the cities. However, if you head to the Colombian countryside, you can often put your coins to good use. For example, in rural Huila, empanadas are still sold for $200!
Along with rapid economic growth, Colombia has experienced fairly substantial inflation, and don’t be surprised at how quickly prices rise. Inflation here is higher than in the United States or Europe.
In this beautiful but tiny Andean country, you’ll find the easiest financial situation of all: The currency in Ecuador is the US dollar. All bills are exactly the same, although Ecuador produces its own coins (penny, nickel, dime, quarter) which are the exact same size but have different images on them. So if you’re heading to Ecuador, hang onto your spare change and bring it with you! It will go far here.
Peru’s currency is the nuevo sol, or “new sun”. For the past 5 years it has traded in a range of between 2.5 to 3 to the dollar, averaging out at around 2.75. Peru is also curious in that it is “semi-dollarized”. That is to say that the dollar is widely accepted for payments. You can pay with dollars in many shops, hotels, or restaurants, and get your change back in soles. That being said, keep an eye on the exchange rate to make sure that you’re getting a fair deal. Most businesses are quite fair about it and will just charge you a couple of percent on the transaction.
Bolivia’s peso is strange in that it is official government policy to fix it at 6.91 to the dollar. Thus you won’t ever have to worry about the whims and fancies of global markets here in Bolivia. Your dollar has been worth 6.91 bolivian pesos for quite some time and will continue to be so, at least as long as Bolivia’s iconic president Evo Morales is in power.
Venezuela presents the strangest and most complicated financial scenario for tourists, travelers, and backpackers.