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Exchanging Money in French Polynesia

currency

Before you go to French Polynesia you need to do some research on their currency. We ultimately saved about $300 in exchange fees. Here’s how.

French Polynesia uses the CFP franc.  The currency code is XPF.  You need to know that you will not be able to use any currency in French Polynesia other than the CFP franc, or the Euro.  You may be able to get away with some US Dollars in some places (only the larger resorts), but really, you should plan to have the local currency in hand before you go.

We live in Canada, so it wasn’t an option for us to bring our currency.  I suppose it is an option, because there is an exchange business at the airport in Papeete, Tahiti Exchange, that is open for all arriving and departing international flights (including

at 5:00 am when we arrived), and the banks will exchange your currency for you.  But really, you won’t get a favorable rate, and you will stand in line when you could be enjoying your vacation.

Having said that, you will get an equally unfavorable rate from the banks at home.  The reason is that the CFP franc is what is known as a slow moving currency in the financial world.  Where US Dollars and the Euro are common, and therefore fast moving, because the banks will have more of that currency on hand, there is such little demand for the CFP franc that they have little of it on hand.

The difference between a fast moving currency and a slow moving currency is in the exchange rate.  As you might guess, the surcharge a bank adds to the exchange rate is much higher for a slow moving currency.  So where the bank might charge a 5% surcharge for a Euro, they will charge a 12% surcharge for a CFP franc.

A quick side note, if you plan to use your credit card, you will be charged the current bank exchange rate plus a 2.5% surcharge on top of that for a foreign currency transaction, on average.  So if you want to avoid the hassle of doing the currency exchange in the first place, you will pay more to use your credit card.  Plus, there are a lot of places that won’t take a credit card in French Polynesia.

So what did we do?  We were encouraged to get some francs before we left home.  Our travel agent suggested a local currency exchange business instead of the bank.  When I did my research I was shocked at what it would cost to exchange money.  And I did a lot of research, to the point of looking at getting new credit cards that paid as much as 4% cash back on foreign transactions.  In that case though, you were still paying the posted exchange rate plus the 2.5% foreign transaction fee!

The posted rate (not the bank rate) for the CFP franc is 0.01232, meaning that 10,000 francs is equal to $12.32 Canadian dollars (CAD).  The currency exchange’s rate is 0.014, so it would cost me $14 for 10000 francs.  That’s a 12% difference!  As it turns out, the bank rate is just slightly less, but only marginally.

The posted rate for a Euro is 1.47, meaning that 10 Euros would cost $14.70 CAD.  The currency exchange’s rate is 1.4893 for a Euro, so it would cost $14.89 for 10 Euros.  That’s a 1.3% difference.  The bank exchange rate is about 5% over the posted rate, so it was far better to use the currency exchange.

At this point you may be asking why I am talking about Euros.  I mentioned earlier that Euros are accepted in French Polynesia.  The way we saved $300 when exchanging our money was brought about from a conversation I had with a co-worker who happens to be from France.  As I was explaining my frustration at the exchange rates he did some quick research and told me that a policy was enacted in 1999 where the exchange rate between Euros and the CFP Franc was set at a fixed rate, and it’s never changed since then.  So where the exchange rate between the Canadian dollar (or US dollar, or Australian, or New Zeland, or whatever) and the Franc will change, the rate between the Euro and the Franc won’t.  I will always get the same number of Francs if I exchange Euros, any day.

So we picked up Euros in Canada and exchanged them for Francs in French Polynesia.  Yes, we had to stand in line.  We had a layover between Papeete and our flight to Raiatea, so we had lots of time to exchange our money.  You pay a small transaction fee, but otherwise it’s always the same.  At the airport it was 700 Francs.  At the bank it was 1000 Francs.

Two key tips: 1) Tahiti Exchange at the airport will only change 500 Euros per person per day.  2) You always need your passport to exchange money regardless of where you do it. I forgot to bring mine once, and was turned away.

I didn’t know about the 500 Euro limit at Tahiti Exchange when we landed, so that left us having to change our plans a bit, but both Sandi and I were able to do a transaction, so we changed 1,000 Euros which was enough for us through our first week of vacation.  When we exchanged Euros at the bank in Bora Bora I was able to change more than 500 Euros.

If you still don’t believe me, here is an example (note the exchange rates are from Nov. 11, 2016).  I am using the rate from the local currency exchange, not the posted rate and not the bank rate:

$1,000 CAD (@1.4893) = 671.50 Euros
$1,000 CAD (@0.014) = 71,428 CFP Francs

671.50 Euros (@119.33) = 80,131 CFP Francs (less 700 CFP transaction fee) = 79,431 Francs

That’s 8,000 more Francs, or approximately $100 CAD.  Given the price of food, accommodations and activities in French Polynesia, having an extra $300 in your pocket goes a long way.

Also, we paid our additional charges at each of the three resorts we stayed at using Euros.  All happily accepted them.

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