Is Mexico only taking the Peso now?

[MJM]

So i've been to Mexico numerous times, the last of which was December of 2009. I booked another trip for December of this year, and was told by my travel agent that effective January 2010, a lot of Mexico would not be accepting the US dollar as payment. I've always switched mmy money to US before I went to Mexico, but now this seems irrelevant. Anyone else here this or experience it first hand?

[bizaro86]

When I was last in mexico (New years last year) everywhere I went would take either USD or pesos, but if you paid USD you had the privilege of being royally screwed on the exchange rate. Does whoever told you though offer a convenient currency exchange service, designed to get you to pay them to convert $ to pesos?

[MJM]

Originally Posted by bizaro86

When I was last in mexico (New years last year) everywhere I went would take either USD or pesos, but if you paid USD you had the privilege of being royally screwed on the exchange rate. Does whoever told you though offer a convenient currency exchange service, designed to get you to pay them to convert $ to pesos?

Nope, it was just as an FYI because they know I usually convert to USD before I go. Sugested I change into pesos instead this time.

[cmyden]

Here's the scoop...

First Air Canada sent out a press release that contained the following...

Mexico Announces new, peso-only policy

Montreal - September 15, 2010 - Effective September 14, 2010, all vacationers travelling to Mexico will be required to use Mexican pesos, as it will be the only currency accepted. American and Canadian dollars will no longer be accepted in the country.

The use of international credit cards is unaffected as transactions will continue to be processed in Mexican pesos, as per current practice.

It is recommended that travellers bring Mexican pesos and/or credit cards to avoid difficulties.

And then changed it to this ...

Montreal, September 16 ,2010

Effective September 14, 2010, the Mexican government will cap the amount of dollars foreigners can exchange for pesos in banks and currency exchange establishments to no more than 1500 USD per month.

The use of international credit cards is unaffected as transactions will continue to be processed in Mexican pesos, as per current practice.

The measure will not affect the amount of cash (in Mexican pesos) an international tourist can withdraw from an ATM machine on a daily or monthly basis.

It is recommended that travellers bring Mexican pesos and/or credit cards to avoid difficulties.

but here's a release that explains the situation in more detail...

SUMMARY

Mexico’s bank limit hinders the use of US Dollars in Puerto Vallarta affecting retirees

On July 2010 a new Mexican banking regulation was implemented by Mexico’s Secretaria de Hacienda (equivalent to the IRS) that severely limits the liquidity of US greenback in Mexico.

As an unintended effect, It reduces the tourist industry’s ability to accept US greenbacks for payment. Therefore, international travelers and retirees will have to find other alternatives to pay for their expenditures in Mexico.

NEW ANTI-MONEY LAUNDERING REGULATION

The purpose of the new regulation is to hinder illicit money laundering of US Dollars, which were being depositing in Mexican bank accounts in very large quantities. Read more about this anti-money laundering regulation in a CNN article.

NEW BANK LIMITS ON US DOLLAR FOREIGN EXCHANGES AND DEPOSITS

Under the new regulation, international tourists can exchange US$1,500 per month at a Mexican bank by showing their passport.

Local bank account holders can deposit US$4,000 per month into their peso-denominated bank account. The limit for businesses is a little higher, around US$7,000 per month. A person without a bank account (such as your typical home worker) can exchange US$500 per month; but it’s nearly impossible to find a bank willing to accept this non-client transaction.

HOW IS THIS AFFECTING THE TOURISM INDUSTRY?

As an unintended effect of the banking regulation, Mexico’s travel destinations, such as hotels in Puerto Vallarta, Cancun, Playa del Carmen and Los Cabos are limiting the acceptance of US Dollars.

These foreign exchange limits make it more difficult for locals to convert the US greenback to pesos in Mexico. For example, a five-star hotel at a vacation destination may receive much more than the allowable monthly $7,000 US Dollar limit in just a single day. The hotel manager, however, needs to pay its employees and suppliers in Mexican pesos, creating a serious Peso imbalance for the hotelier.

Hotels are beginning to feel the cash crunch and are limiting their guests’ exchange of US Dollars to minimum courtesy amounts.

AM I BREAKING THE LAW IF I DO BUSINESS WITH US DOLLARS IN MEXICO?

The use of US dollars in the economy is not prohibited, or limited in any manner. The banking regulation only limits exchanging or depositing US Dollars into Mexican bank accounts. Therefore private citizens and “casa de cambios” continue to accept US Dollars and operate in the foreign exchange business throughout the country.

Many large supermarkets such as Wal-Mart, Soriana and Chedraui continue to accept payment in US Dollars at quite favorable exchange rates.

Other entrepreneurs, such as tour operators, taxi drivers, boat ride owners and ride amusement managers, continue to accept US Dollars, albeit at higher-than-normal exchange rates.

WHAT IS THE BEST WAY TO PAY FOR GOODS AND SERVICES WHILE TRAVELLING IN MEXICO?

The best way is to use your US bank’s debit card to withdraw Mexican pesos at a local ATM machine. For more details, see our article on The best way for retirees to get cash from their overseas bank to Puerto Vallarta. This article compares alternatives such as using traveler checks, US issued credit cards and US greenback.

Short summary: Since locals will have a harder time exchanging USD, they will be less likely to accept it.

cM

[MarchHare]

I was in Mexico last week; I paid USD for everything, but I didn't leave the resort while I was there. Prices were listed in Pesos but they converted to USD at the register and accepted American cash as payment. I have no idea if I was being screwed on the exchange rate or not.

[DuffMan]

I liked it 20 or more years ago, when a Beer was about 2 - 3000 pesos, and when you went out at night, you had a 2" thick wad of bills equalling about 200,000 pesos.

[GoinAllTheWay]

Anyone have any recent experience with can$ in mexico? Heading there next saturday. Is ATM still the way to go?

[MrMastodonFarm]

Originally Posted by GoinAllTheWay

Is ATM still the way to go?

If she's into it.