I wonder if it is a good idea to convert my local currency to Soles or USD before taking off to Peru, is it better to have USD there or Soles?

In general, if you live in a country where they use one of the global reserve currencies (USD/EUR/to a lesser extent GBP) and currency exchange is easy, then you should bring your own currency on the way out, and bring the local currency home on the way back.

It comes down to playing arbitrage on the availability. You can get cash dollars in America without paying any kind of premium, and with cash soles, you would have to pay a premium for the fact that someone went to the trouble of shipping them from a Peruvian bank to your local exchange. In the same way, for an exchange in Lima or Cuzco, they can get a supply of cash soles with no premium - but to order a reliable supply of cash dollars, they would have to pay a premium. This is built into the exchange rate on each side.

So under normal market conditions, the same 100 dollars will get you more soles in Lima than they will in Houston. And the same 100 soles will get you more dollars in Houston than they will in Lima. Because you are receiving a part of the premium for delivering the non-local cash to the local exchange.

That said, be aware of 1) how easy it is to exchange any kind of foreign currency where you live (I do not expect the US banking system to be in any way competitive or consumer-friendly), and 2) whether the cash you are bringing back is in any kind of demand outside of its home country at all.

It took me maybe a year after visiting Taiwan to find a place in Europe that would take Taiwanese dollars, and that was at Frankfurt Airport with a pretty uncompetitive exchange rate. And I still have a few hundred thousand Lao kip that I did not trade to the touts on the Mohan-Boten border, thinking that I would find a better rate in Kunming... turned out that retail currency exchange is not a thing at all in most of China!

A final tip: get an account with a not-quite-bank like Wise that will let you get cash out of ATMs globally very cheaply, exchanging at close to the mid-market rate. You can fill up that account with just your travel expenses, securing your main savings out of the way - and these days, much of the time, getting local cash out of an ATM with a global card will be less expensive than exchanging dollars/euros with a human teller.

As tourist you will be able to do anything with the local currency. Stuff like

- expensive repairs
- shipping

will be offered in $ USD without asking for that point..

@AnTyx: I also own a wise account. Wise is great to move money to the bank of foreign countrys. Cheap exchange & transfer.

But optaining cash is 2x free a month, afterwards the charge between 1,75% and 2% depending of your homebase. As the locals ATMs are often limited for the maximum ammount of cash at once - made it even more "not cheap" or "normal" in comparison with the banking cards you did carry anyway.

For emergency cash a past stealer like western union, seams to got a cheapie today, at least if you did optain cash from your creditcard.



I did just look at my screenshot of the fees for argentina, did not a comparison of the rest of the world:
https://vanlife.4x4tripping.com/2022...with-blue.html

Probably a way too, to get more cash at once - with your wise card.

Surfy

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This is, at best, a terrible example. 100 soles will never, ever be worth as much in Texas as it would in Lima because it's a soft currency, therefore not freely convertible, therefore not much in demand outside its home country. The same goes for most of the world's currencies; unless you've got specific, credible information to the contrary, best bet is to exchange them in their countries of origin or at borders as you exit (and even relying on the presence of money-changers at borders is sometimes unwise).

There are exceptions, but this is the general rule, notwithstanding theoretical descriptions of imaginary global systems of free exchange. Anyone who travels a lot can provide examples of times when they failed to follow this general rule and as a result were stuck with large or small quantities of soft currencies which they had to dump at disadvantageous rates to strangers in bus stations, flog on internet forums, or display on refrigerators at home.

Me, for example. Hope that's helpful.

Mark

You want Soles in Peru. You can convert your local currency at the airport in Lima to obtain some local currency. They are open in the middle of the night when international flights arrive. You can convert US dollars, Euros, and probably other currencies at the airport. I brought US dollars and converted the rest at either a bank or a local currency exchange person. Better rate with the local person. Take a mototaxi and ask "Busco una combio".

There are a lot of cash machines in the major cities. That is how most Peruvians obtain cash. Peru is primarily a cash economy. You won't be able to get cash in the smaller towns, so have enough with you.

My experience in many, many countries (as many as 60 countries per year before I retired) is that the simplest way of dealing with local currencies is to use an ATM to withdraw local money using my Canadian bank card.

When I say "bank card", I don't mean a credit card, I mean the same card that I use to withdraw cash from an ATM in my home country.

When you take local cash out of an ATM using your home country ATM card, you benefit from the best available exchange rate. There is often a fixed charge ($2 to $3) to make the ATM withdrawal, so I try to take out what I will need for the duration of my stay in that country in one transaction, rather than making multiple small withdrawals.

Before I leave the country, I try to use up any leftover local currency paying for my last restaurant meals or paying for a portion of my last hotel bill with the local currency.

I NEVER try to obtain local currency in a third country (meaning, not the destination country), or in my home country. The exchange rate for banknotes (paper currency in your hand) will always be worse than the exchange rate for an electronic transaction.

The only country in which I have ever been unable to withdraw local currency from an ATM was South Sudan, and that was due to US sanctions, not any lack of desire on the part of the South Sudanese banking system.

So, in response to the question that reda_travel_fanatic posed about Peru, the answer is to leave sufficient funds in your home bank account to enable you to withdraw Soles from a Peruvian ATM using your home country ATM card (something I have done before in Peru), and don't take out any more Soles than you think you will need for the duration of your visit in Peru. If you find yourself holding too many Soles at the end of your trip, try to exchange them for some other currency you need (the currency of the next country you will be visiting, or US$, Euro, etc. if that is your home currency) before you leave Peru.

Michael

OMG thank you so much! I've asked around and so many people gave me the exact same advice.

Thanks for your response it is very helpful!

I am currently in Peru & have been using my credit card to draw cash - very easy

BCP ATM’s do not charge a fee & are everywhere

I pay for hotels & gasoline with a card, so I don’t need much cash….mainly just for food & drinks…..but even then, most restaurants take cards