I always feel I’m short-changed when I exchange foreign currency overseas. Should I get the currency before I travel or will I get a better rate at the country I’m visiting?
The value of a currency is always a matter of trust. That said, trust depends on many factors such as political stability, economic growth, the country’s role in international markets, reserves and relatively low inflation. This is why the US dollar is almost universally accepted while for instance, the Argentinian peso is not. Other strong currencies include the euro, Japanese yen, sterling pound and the Swiss franc, among others.
If you’re travelling from country A to country B, it is wisest to obtain B’s currency in A. This is because A wants to get its own currency back while getting rid of B’s currency before inflation reduces the purchasing power of that currency.
In touristy cities such as Prague, it is common to find no-fee currency exchange centres next to famous landmarks. The problem? Their rates are astronomical. One place may offer to buy €1 (Dh4) for 22 Czech crowns (Dh3.28) while demanding 30 Czech crowns to buy €1. The official rate? 27 Czech crowns for €1.
Your best choice is to ask hotel staff for the best place to get a fair exchange rate.
Another point to bear in mind is this: whether you’re using an ATM or exchanging US dollars, never buy high sums of foreign currency unless you’re actually planning to spend it all. Yes, it might be tricky when you just arrive in a new destination and don’t know exactly how much money you’re going to need, but please consider that currency exchange is a very profitable business. Selling prices are very different from the buying prices, so during the process of exchanging the dollar against a foreign currency and then changing the leftover currency back to dollars would lead to losses for you.
Finally, even if you’re not a collector, having foreign coins is always a good idea. Not only are they good souvenirs, but you also have an option of selling them to hardcore collectors. Cuba’s Che Guevara coins, for instance, go for as much as 10 times their real value in the US!