Dollars in Central/Eastern Europe
May 20th, 2005, 05:01 AM
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Dollars in Central/Eastern Europe
Hello...I was speaking with someone who had recently been to E. Europe, and he advised me to bring some US$, saying that dollars are preferred in some locations. I usually just withdraw from ATM's, but now I'm wondering if I should supplement with US$. Does anyone have any firsthand experience with this? We will be in Budapest, Bratislava, and the Czech Republic.Thanks.
May 20th, 2005, 05:12 AM
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In those areas dollars are not welcome. Their own currenceies are perfectly stable and trying to pay in dollars is insulting. And even if you could convince someone to take them - the loss on the exchange rate would be tremendous. (Dollars were not welcome in the Czech republic even the first time I went there 12 years ago.)
In fact - the only place in europe I have been where dollars were welcome was St Petersburg - and then it was ony cab drivers - who wanted $5 US for every ride.
In fact - the only place in europe I have been where dollars were welcome was St Petersburg - and then it was ony cab drivers - who wanted $5 US for every ride.
May 20th, 2005, 05:44 AM
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The only time I have known dollars to be preferable was under conditions of mandated exchange rates that did not reflect reality. If the currency trades in a free market, the legal way is to go through a bank or authorized exchange bureay although the latter agencies usually put it to you.
I have not been in a nation in a long time where the real exchange rate was at great variance with the mandated rate, but in recent years some of the former Soviet regions and now Russia itself have a thirst for dollars because they are so valuable and the mandated rate is out of line with the black market rate.
I remember from my student days that France had a manadated exchange rate of 350 francs on the dollar. If you wanted to step down a back street, you could get 410 to 420 francs on the dollar. Such activities were illegal of course.
The Turks played a little rougher. As I recall, the mandated rate was 12.5 Turkish whatevers per dollar. Turkish law also prohibited the import of more than a small amount of US dollars. People riding on trains were sometimes searched and there were stiff penalties for trying to smuggle money into the country. People did it, but they were in the know and had their system of operation.
I would be wary of that kind of deal.
Of course if the market is a free one, then those activities are legal. And often if a private exchange can be worked out, it is to the advantage of both parties. But I think the folks above are right. If you can pay in dollars, you need to know the exchange rate and be able to calculate immediately whether or not you are getting taken or not.
There have been times when I paid in dollars mixed with foreign currency just to unload what I had. Dutch guilders or whatever were not of much use to me at home,and a few guilder and a few dollars bought me a nice box of candy. I had no idea when I was going back to the Netherlands and the advent of the euro was already preordained.
I have not been in a nation in a long time where the real exchange rate was at great variance with the mandated rate, but in recent years some of the former Soviet regions and now Russia itself have a thirst for dollars because they are so valuable and the mandated rate is out of line with the black market rate.
I remember from my student days that France had a manadated exchange rate of 350 francs on the dollar. If you wanted to step down a back street, you could get 410 to 420 francs on the dollar. Such activities were illegal of course.
The Turks played a little rougher. As I recall, the mandated rate was 12.5 Turkish whatevers per dollar. Turkish law also prohibited the import of more than a small amount of US dollars. People riding on trains were sometimes searched and there were stiff penalties for trying to smuggle money into the country. People did it, but they were in the know and had their system of operation.
I would be wary of that kind of deal.
Of course if the market is a free one, then those activities are legal. And often if a private exchange can be worked out, it is to the advantage of both parties. But I think the folks above are right. If you can pay in dollars, you need to know the exchange rate and be able to calculate immediately whether or not you are getting taken or not.
There have been times when I paid in dollars mixed with foreign currency just to unload what I had. Dutch guilders or whatever were not of much use to me at home,and a few guilder and a few dollars bought me a nice box of candy. I had no idea when I was going back to the Netherlands and the advent of the euro was already preordained.
May 20th, 2005, 06:42 AM
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On literally 3 different occasions with 3 different tour guides, I was offered a significant discount if I paid them cashin US dollars rather than cash in Czech crowns.
For example, an 800 crown fee was reduced to $25 if I paid in $US, which was better than anyone's exchange rate.
I'm sure it has something to do with being in a cash business or declaring taxes, I don't know for sure. I'm sure it's shady, but not objectionable to me.
I would not do this when charging, or paying cash,to a hotel, restaurant or other registered business. I can't say why, I just wouldn't.
For example, an 800 crown fee was reduced to $25 if I paid in $US, which was better than anyone's exchange rate.
I'm sure it has something to do with being in a cash business or declaring taxes, I don't know for sure. I'm sure it's shady, but not objectionable to me.
I would not do this when charging, or paying cash,to a hotel, restaurant or other registered business. I can't say why, I just wouldn't.
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May 20th, 2005, 10:03 AM
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Just another experience -- I haven't been to Bratislava but have been to the other two places and saw no evidence that USD would be preferred to local currency. I don't know what locations your friend could be referring to (unless illegal activities, as noted). No one ever asked me for USD and I never saw better rates for USD. Some places in Budepest would accept USD (places very dependent on tourists, like crafts shops), but they also would accept GBP or Austrian schillings, etc (at that time). Some places even in the very heavy tourist areas of Budapest would not accept USD, and that was several years ago.
ANy place that accepted them gave you a worse deal than local currency--they were basically functioning as a currency exchange.
ANy place that accepted them gave you a worse deal than local currency--they were basically functioning as a currency exchange.
