The peso originally was based on the silver dollars of imperial Spain, which were easily mined in Mexico. It was the official monetary system of all of North America, including the United States, during the late 18th century and was widely used continent-wide for decades after the U.S. began issuing its dollar in 1792. Mexico kept the currency when it gained its independence, and the silver content was gradually decreased over the years.
Facing heavy devaluation after the oil crisis of the late 1970s, Mexico in 1993 enacted the Stability and Economic Growth Pact, which created the peso system in use in Mexico today. The revalued nuevo (new) peso was equal to 1,000 of the former pesos. The word "nuevo" was dropped from the currency's name in 1996. Coins and bills minted before this change are now obsolete but can be exchanged at the Bank of Mexico for new currency.
Currency rates fluctuate daily, but some basic math provides a good ballpark figure of costs in pesos versus the costs in other common currencies. With both the U.S. and Canadian dollar, the ratio is usually close to 10 pesos to 1 dollar. To estimate the value of something priced in pesos, simply drop the last number of the price; so 100 pesos becomes 10 dollars, for example. With the Euro and the U.K. pound, the ratio is closer to 20-to-1. These are only rough estimates and should not be used as the basis of any official conversions.
Travelers can exchange foreign currency for pesos at many locations in Mexico, although some are more reliable than others. Banks generally are not good options, as many require you to have a local accounts to exchange foreign currency, or take a long time to process exchanges. The exception is banks that have a window or annex specific for foreign exchange. Exchange houses, locally called "casas de cambio," are the best option, although the exchange rate will vary from place to place. Airports generally offer worse rates than the exchange houses, although Mexico City's airport offers some of the best rates in the city. Most hotels will exchange money, but the rate is usually worse than at exchange houses.
ATMs in Mexico offer one of the best options for acquiring pesos without having to directly exchange foreign currency. They will give rates at or near the bank's rate, although they may charge service fees of up to 4.25 percent. Banks with ATMs throughout Mexico include Bancomer, Banamex, Banco Santander, Banorte, HSBC and Scotiabank. Major hotels and restaurants also will accept credit cards, which will charge purchases in pesos to be converted by the card's issuing bank. A foreign exchange charge of up to 2.75 percent of the transaction usually applies. In addition, most vendors take U.S. dollars. While the exchange rate for direct vendor transactions is not as good as an exchange house, it can be worth it if you are making only a few small purchases.
