Currency Exchange — México
The peso is traded on the international currency markets and its exchange rate changes every business day against all major currencies. Historically, the peso's exchange rate has fluctuated widely against the US dollar, the Euro, the Canadian dollar and other major currencies. The inflation rate, however, has been low to moderate since 2001, so the prices of goods and services should remain steady. For current and reliable currency conversion rates check the website: xe.com.
México is still primarily a cash-based society and most sales are transacted in pesos, especially in small towns, villages, and rural areas. US dollars and other major currencies are often accepted as payment or exchanged at resort areas and business that cater to upscale tourists. For this service they usually extract a steep cut -- as much as 10% -- from the current currency exchange rates. To avoid this added cost, it is best to keep sufficient pesos on hand. The exception to all this is along the northern border in places like Tijuana, Ciudad Juarez, and Matamoras where US dollars can be be used for most, if not all, transactions.
Exchanging most major foreign currencies -- not just US dollars -- is easy at banks and casas de cambio (currency exchange businesses) in areas that travelers frequent. Outside of these areas, it is easier to exchange US dollars. Some guidebooks suggest that non-US based travelers can save money by exchanging their cash back home for US dollars and then upon arrival in México exchanging their US dollars for pesos. This may be true for less commonly exchanged currencies, but for Canadian dollars, Euros, British pounds, Swiss francs, Australian dollars, Yen, and other major currencies exchange rates in México are attractive and commissions are low to non-existent. For those visiting areas frequented by tourists exchanging money twice seems pointless. It does, however, make sense if venturing outside of the more tourist-trodden areas to convert home currencies to the more easily exchanged US dollar or to stock up on pesos.
Méxicans living and working in the United States send billions in remittances back to México every year. The flow of billions in to México creates a robust competition among Méxican banks and casas de cambio resulting in attractive rates for exchanging US dollars and pesos. This undercut any black market outside of narcotraffickers laundering drug money or other serious criminal activities. If approached about exchanging currencies, it is best to decline and use established banks and casas de cambio.
Many guidebooks publish prices in US dollars. Because of wide fluctuations in exchange rates over time between the peso and US dollar, prices published in US dollars are poor predictors of the actual costs in the near future. With the peso's relatively low inflation, prices published in pesos will be closer to the mark a year or two out. For these reasons, and because of the predominance of transactions in pesos, prices published in this guide are in pesos and denoted by Mex$. In some cases where businesses publish their prices in US dollars, the price is published in US dollars for clarity and denoted by USD$.