When a countries currency is overvalued, it leads to a much lower exchange rate for the foreign buyer. For example, if the world market price of 1$ equals 5 Sudanese pounds but the government sets the official exchange at 2.7 pounds, you are effectively robbed of 2.3 pounds. That’s nearly 50%! And national banks and cash machines, if available, are the robbers.
However, not to worry my fellow backpackers and runaways, there is a way to beat the system. And it lies within the black market currency exchange. Although it is technically illegal, in my opinion, it is no more illegal than those government’s detrimental currency policies. So, in order to maximize the value of your Dollar/Euro/Pound or other currency, and sustain your budget, the black market currency exchange is the way to go.
Finding A Black Market Bank:
Black Market banks are illegal, and as such you won’t find them in the phone book or with a sign out front. Despite this, they aren’t as hard to find as you might think. Often, just a few miles after a border crossing, black market bankers will appear at your sides. They are usually just teenage boys, but can be devious, so make sure you know the exchange rate.
If you are within a city, finding a BMB may prove a little trickier. Since they are usually disguised in the form of small markets or restaurants, you will need to ask around to find them. The best way to begin is by simply asking your hotel or hostel reception. However, since many reception workers have prearranged commission agreements with black market bankers or just take a cut for themselves, you may not always get the best price. If you think you’re getting cheated, just walk away. Don’t be swayed into an unfair deal just out of politeness. The best way to find a good banker is to ask other tourists. If none are around, try locals and shop owners.
Black Market Etiquette:
Once you find your local black market branch, you must try and be discreet. Counting your Benjamin’s in plain view won’t make your teller too happy. Trying to negotiate a rate while the store is full of people won’t help your cause either. Thus it’s best to wait until the store is empty to start your transaction.
Getting The Best Rate:
To get the best rate possible, you need to know what the current rate is. This can sometimes be found on the internet, but due the illegal nature of the black market, rates can change drastically in just a few days. A police crack down could make the market more risky and thus drive the price up. To find out the current rate, it is best to ask other tourists.
Another factor to consider in trying negotiating the best rate is your bill size. Since bankers generally deal in larger transactions, ones, fives, and tens, will get the worst rates. So be sure to make your exchanges in Benjamin’s. The difference in return can sometimes be as much as 20%.
Conclusion:
Although the black market is, as its name suggests, illegal, it is a relatively safe way to exchange your currency. This is mainly because local police are often corrupt and in cahoots with black market bankers. However, since it is the black market, and your’re dealing with precious travel funds, be sure to find a banker you trust, know the rate before hand, and as always, trust your instincts.
So, how many times have you dealt with the black market? Just in Sudan, or many other places?
Hey Jay, in Sudan and a lot of of land borders in Central America and Southeast Asia.
Hey man, love your post about this, it’s quite informative and unique! One thing though: naming it as “black market banking” implies devious behavior, yet is it really illegal? I am sure that it must be banned in some countries, because the government does nees to be able to tax this kind of transaction. However, if you simply want to exchange your $100 for its equivalent in euros, with some teen-aged kid who is willing, is it really something that we should keep on the DL? Perhaps if this kid is blatantly doing business in this way, I assume. Not trying to argue the validity of your points, just curious! Maybe I could save some change by using this method instead of changing at the airport. Great post, bro!
Hey Christian,
Glad you found it helpful!
It is devious, and technically illegal at least in any governments eyes. The government wants to prevent black markets because it defeats their currency strategy.
The airpot is definitely the worst place to exchange money wherever you are. In my experience, the best places to exchange money are 1) black market banks 2) Small non-franchise shops because they usually give the best rate and take the smallest commission 3) With your bank card at atms
Good article, albeit granted.. just start asking around for the nearest BMB when you are on a foreign country with limited resources and language barrier, well. to say it is a challenge is an understatement. Unless you have a tip from someone you know that can direct you to a BMB, I would say it nearly impossible, if not plain dangerous!
Most locals know and will tell you where to find one. At least, this was my experience in Sudan. And in Sudan it’s super illegal and punishable by 40 lashes if the dealer is caught.