Is foreign currency accepted?
Yes, in selected places. However, not all foreign currency is accepted. The chief currencies that tourists can use in places such as hotels, selected restaurants and shops in malls are the dollar, the Euro and the sterling pound. However we recommend that you trade in your money. More often than not, it will cost you less to purchase in local currency. Taxi drivers accept dollars, Euros and the pound, especially the ones found at the airport, shopping malls and hotels. Again, we advise that you trade into local currency if you plan to use local services such as transport and restaurants. Some restaurants and travel services are strict on local currency and will not accept the foreign currency at all. Therefore, we advise that you have a part of your cash traded in local currency as soon as you arrive at the airport.
Where do I trade for local currency?
Hotels and guet houses normally offer this service to tourists so that they can save them the hustle of getting lost in the city and being conned by double dealers. While this is admirable, there is a downside. Hotels and guest houses are not up to par with the forex market. Most of them have fixed trading prices that may not correlate well with the market. You may end up trading your dollar for 78 Kenya shillings while the market sells at 85. Hotel rates are likely to be poor. Find a forex bureau, especially one in a mall or in a bank. Do not deal with third parties to trade your money for you. Do not use the cab driver and do not use the porter. Use an official bureau where they will require you to produce your ID so that you can get value for your money. If you trade down by even one shilling, you will realize you lost good money that could buy you a nice souvenir that you found you couldn't afford much later.
Is it true that dollars are the best currency to trade with?
No. Actually, the Euro and the pound trade very well in East Africa. If you have pounds or Euros, there is no need to trade into dollars and then into local currencies. You will lose money in the double exchange. Convert directly into local currency.
What about ATMs?
There are ATMs all over the country. Many support brands such as Visa and MasterCard. You need not worry if your bank's debit card is catered for international use. It will work in East Africa. However, some foreigners have suffered a few complications with cards that refuse to work. Don't forget to let your bank know, before you travel, that you will be using your card in ATMs in East Africa. This will sort out any potential problem so that you don't have to make international calls to sort out your predicament. In fact, withdrawing from the ATM will be cheaper than converting currencies at bureaus.
Should I carry all my money in cash?
We advise against it. Should any misfortune happen such as a lost purse, you will be in quite a fix. An ATM provides a safe haven for you to withdraw money only when you need it. Using ATMs also makes your travel in a less bulky manner as you only carry cash for immediate needs.
Should I trade all my money into local currency?
No. You may trade all your money into local currency and not end up spending all of it. We advise that you trade in bits. You would rather make three trips a week to the forex bureau than make one and have leftover local currency. Converting it back to foreign currency will cause you to lose cash. Convert only what you need. Use it. Convert some more when you need some more local cash.
Can I tip in foreign currency?
Yes you can.
We also advise you to research in advance on hotel rates, cab prices and possibly ask your travel itinerary experts to help you out. You will find it a worthy save and cultural experience for example to use transport services like matatus in Kenya and avoid expensive taxis. There's much to enjoy at affordable prices in East Africa. That's as basic as you need to know about your money before travelling to East Africa. Save well, plan well, spend well!
Our final tip would be: forex bureaus in Kenya tend to give you better deals if you have loose change as opposed to only fixed USD 100 bills only(for example). Also, in Kenya you can always negotiate on the rates provided, don't just trade on the given prices.