# Peso or dollar?



## 1happykamper (Nov 5, 2012)

So I'm starting to settle in my new country..transitioning slowly from tourist to resident. I have opened a Mexican Bank account and have a small amount of pesos in it.

My question relates to inflation, economy etc between my USA dollar income and savings that feeds my Mexico peso bank account. I am looking for a website that talks about the ratio and due diligence of saving/ keeping money in peso verses the US dollar. Current Inflation in Mexico is slightly higher than USA but its may more more complicated than that? Anyone have this sort of info for me?

Cheers


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## Uecker_seats (Jan 26, 2012)

I DN much about "crunching the (specific) Numbers" are, but I've noticed in my travels to Mexico's Pacific coast and to the Yucaton, and noticed that most all of the high end tequila stores price their tequila at USD$'s. There is also one high end restaurant in Pto Vallarta where the owner bases his meal prices in USD, and he's Canadian. Seems to me that me be a indication of the dollars edge over the peso in lets say oh the last 6-7 years, and I'd also venture to say that these establishments probabaly have a higher profit margin and or/operating costs.


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## 1happykamper (Nov 5, 2012)

Uecker_seats said:


> I DN much about "crunching the (specific) Numbers" are, but I've noticed in my travels to Mexico's Pacific coast and to the Yucaton, and noticed that most all of the high end tequila stores price their tequila at USD$'s. There is also one high end restaurant in Pto Vallarta where the owner bases his meal prices in USD, and he's Canadian. Seems to me that me be a indication of the dollars edge over the peso in lets say oh the last 6-7 years, and I'd also venture to say that these establishments probabaly have a higher profit margin and or/operating costs.


So..translated, you mean keep my money in USD?


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## Uecker_seats (Jan 26, 2012)

That's what I would do. All you need to do is set up a checking and/or savings account at a Mexican bank and they can convert USD into peso's when you need them.


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## joaquinx (Jul 3, 2010)

Uecker_seats said:


> That's what I would do. All you need to do is set up a checking and/or savings account at a Mexican bank and they can convert USD into peso's when you need them.


Wouldn't that mean you would be getting a worse exchange rate than withdrawing funds from the ATM?


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## TundraGreen (Jul 15, 2010)

Uecker_seats said:


> I DN much about "crunching the (specific) Numbers" are, but I've noticed in my travels to Mexico's Pacific coast and to the Yucaton, and noticed that most all of the high end tequila stores price their tequila at USD$'s. There is also one high end restaurant in Pto Vallarta where the owner bases his meal prices in USD, and he's Canadian. Seems to me that me be a indication of the dollars edge over the peso in lets say oh the last 6-7 years, and I'd also venture to say that these establishments probabaly have a higher profit margin and or/operating costs.


I think establishments in tourist areas pricing things in dollars is more about appealing to tourists than it is about currency rate speculation. Also, the exchange rate they give you when they do that is often much worse than you would get at a bank, ATM or currency exchange joint with posted rates.


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## Uecker_seats (Jan 26, 2012)

Will, if I'm not mistaken the national Mexican banks give the same exact exchange rate as the bank ATM's, and up untill a year or so ago all you needed was to show your passport to exchange USD, now you need a bank account. In my last two trips to Cancun Banmex allowed me to exchange $20's for smaller peso notes at the bank exchange rate, just showed my passport.


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## TundraGreen (Jul 15, 2010)

Uecker_seats said:


> Will, if I'm not mistaken the national Mexican banks give the same exact exchange rate as the bank ATM's, and up untill a year or so ago all you needed was to show your passport to exchange USD, now you need a bank account. In my last two trips to Cancun Banmex allowed me to exchange $20's for smaller peso notes at the bank exchange rate, just showed my passport.


I agree. I meant that places like hotels, restaurants, and gift shops that take dollars give a less favorable exchange rate.


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## joaquinx (Jul 3, 2010)

Uecker_seats said:


> Will, if I'm not mistaken the national Mexican banks give the same exact exchange rate as the bank ATM's, and up untill a year or so ago all you needed was to show your passport to exchange USD, now you need a bank account. In my last two trips to Cancun Banmex allowed me to exchange $20's for smaller peso notes at the bank exchange rate, just showed my passport.


You have to compare the posted exchange rates at banks against the exchange rate you get when you withdraw from an ATM. The ATM exchange rate is better than banks or casas de cambio.


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## Uecker_seats (Jan 26, 2012)

True if you go to any store or restaurant, they usually will round down to 10 pesos/ to the dollar, and with the current rate hovering around 13/1 it is to their advantage to taking the USD, true. If your going out, and spending cash peso's get them via atm or exchange for them at the bank. I also wanted to point out on this board also that there should be no SHAME in spending USD in Mexico, if that's what you prefer, or in some cases if that's all you currently have available at the time. I most often stay at AI resorts, and it behooves me to take down $100-150 USD bills for tips for the resort worker, bartenders, waiters, maids etc. When I run out I go to the ATM and get pesos, usually cashing out to mostly 20 peso notes for tips. If your ever brave enough to post something like this on the TA Pto Vallarta form, you will face judge, jury, and executioner. No, it's not rude spending USD in another country. No, the workers you give the USD tips don't have to travel dozens of miles and line up for hours at a time to cash them into pesos on their only day off. These are some of the romanticized myth's that are simply NOT true, but are perpetuated over and over on forums, sort of a south of the border "urban myth".


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## Isla Verde (Oct 19, 2011)

Uecker_seats said:


> . . . I also wanted to point out on this board also that there should be no SHAME in spending USD in Mexico, if that's what you prefer, or in some cases if that's all you currently have available at the time. I most often stay at AI resorts, and it behooves me to take down $100-150 USD bills for tips for the resort worker, bartenders, waiters, maids etc . . .


This may be true if you're on vacation at AI resorts that cater to gringos, but if you actually live in Mexico, as I do, then dollars most likely won't be accepted in stores, by taxi drivers, on public transportation and so on.


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## makaloco (Mar 26, 2009)

That may very well be true in resorts and other places that deal frequently with foreign visitors, but I wouldn't generalize it to include other businesses or all parts of Mexico. When paying in pesos, I've had small restaurant owners and the like try to give me change in dollars because "a tourist paid them that way, and they didn't know what to do with it" other than pass it on to another foreigner. Your resort employees likely have an agreement with their employers to cash in the dollar tips for pesos.


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## circle110 (Jul 20, 2009)

Uecker_seats said:


> I also wanted to point out on this board also that there should be no SHAME in spending USD in Mexico, if that's what you prefer, or in some cases if that's all you currently have available at the time. I most often stay at AI resorts, and it behooves me to take down $100-150 USD bills for tips for the resort worker, bartenders, waiters, maids etc. When I run out I go to the ATM and get pesos, usually cashing out to mostly 20 peso notes for tips. If your ever brave enough to post something like this on the TA Pto Vallarta form, you will face judge, jury, and executioner. No, it's not rude spending USD in another country. No, the workers you give the USD tips don't have to travel dozens of miles and line up for hours at a time to cash them into pesos on their only day off. These are some of the romanticized myth's that are simply NOT true, but are perpetuated over and over on forums, sort of a south of the border "urban myth".


I'm sorry, I am not meaning to judge you but....

That "romanticized myth" is quite true if you live or travel anywhere but AIs or the tourist locales like PV or Cancun.

I don't ever carry dollars but I have observed many transactions where the payer was trying to pay in dollars.

It's for certain that no one here in Guanajuato wants US dollars, nor in Mexico City, outside maybe the airport and some major international hotel chains. 

Frequently, people will flat out refuse dollars or they will ask you to go exchange them yourself for pesos. Only as a last resort - and at a terrible exchange rate to you - will they accept them. My Mexican friends who have businesses gripe about it whenever someone tries to pay with dollars. It's a hassle for them that they don't want.

Sorry, but I have watched that "urban myth" play itself out in real life many times over and it is indeed based in fact.


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## GARYJ65 (Feb 9, 2013)

circle110 said:


> I'm sorry, I am not meaning to judge you but....
> 
> That "romanticized myth" is quite true if you live or travel anywhere but AIs or the tourist locales like PV or Cancun.
> 
> ...


I agree: USD is no common currency in Mexico
As they say: when in Rome... And in Mexico we do not use or like to be paid in dollars,


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## Uecker_seats (Jan 26, 2012)

makaloco said:


> That may very well be true in resorts and other places that deal frequently with foreign visitors, but I wouldn't generalize it to include other businesses or all parts of Mexico. When paying in pesos, I've had small restaurant owners and the like try to give me change in dollars because "a tourist paid them that way, and they didn't know what to do with it" other than pass it on to another foreigner. Your resort employees likely have an agreement with their employers to cash in the dollar tips for pesos.


My favorite resort is a AI all adults in the south end hotel zone, Cancun, very well managed resort and extrodinary friendly staff, some of the employees are like family to me. I know for sure that there is no agreement with the resort or management, quite far from that in fact. The bartenders and the waiters/waitresses pool their tips togeather and split them equally, be it pesos or dollars. If you think that they are going to allow the hotel to get involved with this, even changing the dollars for pesos at the front desk that doesn't happen. The maids don't pool their tips, so this is why when I tip my maid I hand it to her directly when no one is around, and tell her descreetly in Spanish to keep it, I'd hand it again to her tomorrow like this and more crevaza for the minibar por favour:clap2: Housekeeping management will extort a rake from the maids when they see tips left on the pillow in the room, this is why I do this. It's the employee's resposibility to change it in, but again they do not have to travel miles and miles and wait in line for hours at banks or cambios to change them on their only day off. As for the situation of the individual requesting that his USD spending customer change them to pesos and then come back, most people including myself would not do that, take my business elswhere, and even would have no problem with the business owner that would give me a inferiour exchange of 10/1 what is usually done, the owner is grateful for your business, and, the smart Mexican business owner is not going to complain when he goes to the bank to exchange knowing darn good and well he had raked a additional %30 profit for his goods or services for taking the USD, rather then gripe about it to other friends family or coworkers. The guy that tells me to go change and come back looses out also, because I don't come back, opting to change to pesos and go elswhere, or find the business owner who will gladly take them to his atvantage.


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## conorkilleen (Apr 28, 2010)

Uecker_seats said:


> That's what I would do. All you need to do is set up a checking and/or savings account at a Mexican bank and they can convert USD into peso's when you need them.


This sounds like a horrible idea. Its the only option for some, but I have BoA and have a Santander account. There is no bank fees or international fees to withdraw cash here in Mexico at the caja if you have a BoA account/debit card. The exchange rate is the best. exact conversion. No Buy/sell rates apply.


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## alexdz (Nov 18, 2012)

I thought I read somewhere that Mexico was actively discouraging trade in USD. Something about drug money?

And no offense but I'm just amazed at the confident expertise displayed by someone whose in-country experience seems to be limed to time spent in resorts.


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## miltiano32 (Jan 18, 2013)

alexdz said:


> I thought I read somewhere that Mexico was actively discouraging trade in USD. Something about drug money?


I've read something about this months ago, also something about mexico not having faith in the US dollar anymore, the value keeps going down with the more money being printed. I would prefer pesos over dollars any day or gold as a matter in fact.


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## mickisue1 (Mar 10, 2012)

While it may be true that the service people in your AI like the USD you hand them, have you ever actually asked them if they would prefer pesos?

And, if you did, would they lie and say "No", in order to avoid offending you? 

An AI is not MX, it is a little world all to itself. It makes no more sense to extrapolate from your experience in a MExican AI, than for a Canadian, who stops in restaurants and hotels along the north shore of Lake Superior in the US, to claim that Canadian dollars are commonly accepted at par in the US. 

After all, they see signs all over stating "Canadian currency accepted at par."

They are on the North Shore, where the need for tourists trumps the need for a small markup from $ CDN to $ USD. But go even into the small city of Duluth, and the signs vanish; you'll need to change your money. 

It makes no sense to expect people who trade in a stable currency to accept--even prefer!-- the currency of another country. And, to my mind, it's disrespectful of them.


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