Monday, Sep 12, 2016
I want to talk about money and the availability of “change” in Ecuador. It is an interesting dance. First a little background. Ecuador uses US currency as its official currency. All paper bills used here are exactly what we see and use in the US. Coins here are what we see and use in the US, as well as some “Ecuadorian” coins. The denominations of the Ecuadorian coins are the same- penny, nickel, dime, quarter,and Β half-dollar, but the design is different than on a US coin.
All money used in Ecuador is printed and minted in the US, even the coins with an Ecuadorian design on them. Ecuador pays a fee to the US when they buy money for the country. So a dollar costs the government more than a dollar to bring into circulation.
Because money costs more than its actual face value to put into circulation, there isn’t an over abundance of it. This directly affects the amount of “change” vendors and stores have on hand. It is almost impossible to be able to receive change for anything larger than a $20 unless you are at a bank or large retail business.
Now some of the large supermarkets will take your $50 or $100 dollar bills when buying groceries, but your total bill better be over $40 and $80 respectively, or watch how the cashier will balk. You will be asked for smaller denominations, or for more exact change. Even if you hand a $20 over for something that is under $10, you will often be asked if you have a $10.
The same is true for the odd cents amount. If your bill is $9. 36 and you hand over a $10, you will often be asked if you have the 0.36 cents. There is a resistance here to “make change”. I never understood why until someone explained the cost of bringing money into Ecuador.
An interesting thing happens when extranjeros spend money here. As we pull money from ATMs, the banks (or government) are not having to pay the fees normally associated with bringing US money into circulation. Our home banks have to make good on the funds withdrawn, so the transfer happens without the additional charge. This means that when extranjeros spend money via this method in Ecuador, we are actually adding more value into the economy than the money we are spending. Pretty cool huh.
Today I was at Corral which is a large “Walmart-like” retail chain in Ecuador. Any particular store, in a city like Cuenca, is moving thousands and thousands of dollars through its cash registers each day. I make it a point when I am in these stores to always use my biggest bills and “get change”. The reason is simple; when I am in a taxi, or at a small tienda, or at the farmers market, using a $10 bill can be an issue. These vendors are always asking for the smallest denominations and exact change for what is owed.
The amount I owed at Corral was $62.50. I gave the cashier four $20 bills. He gave me $2.50 in coin, and a $10 bill, and asked me to wait while he got change. He did not have any $5 bills in his register. I watched him give a manager a $10 bill so my cashier could get two $5 bills back. The manager left and I’m not exactly sure where he went, but he came back and said he had no $5 bills. My cashier then gave me another $5 in coin…two $1 coins, four half-dollar coins, and four quarters. Crazy right?
I was happy to have all those coins because in Ecuador they are the most useful. And by the way, rarely will you see a $1 bill used here. The $1 coin is what is most commonly used. It makes sense. The lower dollar amounts are exchanged most often in transactions, so the dollar coin lasts years longer in circulation than a dollar bill would. Using dollar coins took some getting used to for me, but now it seems very normal.
So this is a tip about surviving in a limited “change” environment. Always use your largest bills at businesses that have, and can more easily, provide change. Then as you buy goods from the mom and pops, you will have the smaller denomination bills and exact change they ask for.
Chau.
Hi Todd !
Really good to know! So I’m guessing that we should arrive with a pocket full of coins and one dollar and five dollar and $10 bills. Will the hostels take 20s or 50s? When we stay up in Montanita our total bill for the four nights is $177. We were thinking that we would Bring a $100 bill and some 20s. Will they take that or should we pay them in tens and 20s?
Thank !
Laree
Hi Laree,
You don’t need to bring any coins. I would have lots of $5 and $10 bills to use at shops and restaurants. $20s are good when you have larger purchases. I think the hotels will take your $100s, but other than that, they are going to be a pain to use. Would consider having more $20s than $100s. And the reality is you don’t need to bring that much cash. ATMs dispense $20s and $10s, so you can always get what you need when you need it…unless the system is down π
Todd
Hi there, do we need to bring one dollar bills?
We’ve been collecting them over the last few weeks I think we’ve got about 45 now π it’s going to fill up my money belt !
You never see silver dollars here in the states or at least rarely. Only at the Casinos.
Thanks!
Laree
Bring your one dollar bills. They will be useful. The US dollar coin used here is the Sacagawea; never took off in the States but it’s the main dollar currency used here. π
Todd
Thanks Todd. I’ll load them in the money belt ! π
Laree
Hi Todd, what about credit cards? I’m assuming that very few establishments accept them. Is this correct?
Hi Hannah, credit cards are hit and miss in Ecuador. In the smaller towns most restaurants, tiendas, hostel/hotels, and places of business do not take them. In the larger cities…Quito, Cuenca, Guayaquil…the larger business will take them. Having said that, some businesses will add 5% for using them. It seems cash will always get you a better deal here. Even the bigger retail stores will negotiate. The large grocery stores, Supermaxi and Mi Comisariato, however take credit cards without any extra fees or hassles.
The large farmer’s markets in the cities are all cash as far as I’ve seen. Hope this helps, and thanks for reading!
Todd