Mexico’s bank limits reduce the acceptance of US Dollars in Puerto Vallarta affecting retirees

Aug. 8, 2010 - PRLog -- PUERTO VALLARTA, MEXICO

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.

Find out the best way to make payments following this link http://rentalsinvallarta.com/tag/retirement-2

I LIVE IN MEXICO AND NEED TO BUY US DOLLARS FOR A TRIP ABROAD, AM I AFFECTED?

There are no limits on banks selling dollars to individuals or businesses. The regulation only limits the banks’ ability to purchase US Dollars.

# # #

About www.rentalsinvallarta.com

http://RentalsInVallarta.com offers luxury condos, exclusive hotels and standalone villas in Puerto Vallarta Mexico and surrounding areas. Visit our “Travel Deals” section for special deals and coupons.