The official currency of Chile is the Chilean peso (CLP), which has been in circulation since 1975. The peso is divided into 100 centavos and is represented by the symbol “$”.
Chilean banknotes come in denominations of 1,000, 2,000, 5,000, 10,000, and 20,000 pesos. Coins come in denominations of 1, 5, 10, 50, 100, and 500 pesos.
This article explores the Chilean peso, the official currency of Chile, tracing its history from its origins to its present-day role in Chile’s economy. When traveling to Chile, it is important to familiarize yourself with the currency’s history and its exchange rates to avoid any unnecessary expenses.
Historical Journey of the Chilean Currency
The Chilean currency has had a long and varied history, dating back to the early 1800s. The first Chilean peso was introduced in 1817, and it was initially only produced in coins.
However, paper currency was introduced soon after the peso’s issuance, out of necessity when gold and silver were scarce. Even still, Chilean paper money was issued very rarely in the first part of the 19th century.
In 1960, Chile decided to replace its peso with a new currency, the escudo, at a value of one escudo per 1,000 pesos. This was done in response to high inflation rates, which had eroded the buying power of the peso. However, the escudo was short-lived, and in 1975, the current peso was introduced.
The current peso has circulated since 1975, with a previous version circulating between 1817 and 1960.
The inflation and buying power of the Chilean currency has been a major concern for the country’s government. Inflation has been a persistent problem in Chile, and the government has taken steps to combat it.
One such step was the creation of the Unidad de Fomento (UF), a unit of account used in Chile. The exchange rate between the UF and the Chilean peso is constantly adjusted for inflation so that the purchasing power of the Unidad de Fomento remains almost constant daily during low inflation.
History of Coins
The Chilean peso has been the country’s official currency since 1975, taking over from an older version that was in circulation from 1817 to 1960. It was initially divided into 100 centavos until this subdivision was removed in 1996.
As of February 2023, the exchange rate hovered around 800 pesos to 1 US dollar.
The first iteration of the peso was introduced in 1817, valued against the Spanish colonial reales, and underwent several modifications in its subdivisions and value alignments against foreign currencies, including the French franc and the British pound until the escudo replaced it in 1960 at a rate of 1 escudo = 1000 pesos.
From 1817 to the late 1950s, Chile minted various denominations of coins in copper, silver, and gold, reflecting changes in the monetary system and gold standard adjustments.
The country also saw the issuance of paper money initially by private banks in the 19th century, and later by the government and the Banco Central de Chile in the 1920s, marking the end of private note issuance.
These banknotes and coins underwent several redesigns, especially during periods of economic adjustments and political change, including the introduction of decimal coinage and the shift from the gold standard.
The current peso, introduced in 1975 to replace the escudo, initially featured denominations subdivided into centavos until inflation rendered these coins obsolete.
Modern Chilean coins range from 1 to 500 pesos, with designs evolving to reflect Chile’s cultural heritage and democratic milestones post the military dictatorship era, including the significant redesign to feature national heroes and indigenous figures.
Notably, a spelling error on the 2008 series of the 50 peso coin turned these coins into collectors’ items. The peso’s journey reflects Chile’s economic history, political changes, and cultural pride, encapsulated within the coins and banknotes that have circulated through the nation’s hands over centuries.
History of Bills
Chilean banknotes have a rich history dating back to the first paper money issued between 1840 and 1844 by the treasury of the Province of Valdivia. In the 1870s, various private banks started issuing paper money, with denominations ranging from 1 to 500 pesos.
By 1881, the government began issuing paper money convertible into silver or gold, introducing denominations up to 1,000 pesos. The production of private paper money ended in 1898 when the government issued provisional notes.
The Banco Central de Chile took over note issuance in 1925, introducing a range of denominations that continued until 1959, including a significant 50,000-peso note.
In response to inflation, Chile introduced new banknotes in 1976 in denominations from 5 to 100 pesos, with higher denominations introduced in subsequent years, including 500, 1,000, 5,000, 10,000, 2,000, and 20,000 pesos.
The lower denominations were eventually replaced by coins, leaving only the higher denominations in circulation. In 2009 and 2010, redesigned versions of the four highest denominations were issued, with the 1,000-peso note released in 2011.
In 2004, Chile began issuing polymer banknotes for the 2,000, 5,000, and 1,000 peso denominations, marking the first time new banknote families were introduced for reasons other than inflation.
Currently, only the 10,000 and 20,000 peso notes are still printed on cotton paper. The new notes, designed and produced by Note Printing Australia Ltd and Crane AB, are more difficult to falsify due to advanced security measures, ensuring greater protection against counterfeiting.
Inflation and Buying Power of the Chilean Peso
If you are planning to travel to Chile or invest in the country, understanding the inflation rate and buying power of the Chilean currency is crucial. The Chilean peso (CLP) has been subject to high inflation rates in the past, which has affected its purchasing power.
According to the inflation calculator on InflationTool.com, the inflation rate in Chile between 1971 and 2023 was 12,638,080.34%, which translates into a total increase of $12,638,080.34.
This means that 100 pesos in 1971 are equivalent to 12,638,180.34 pesos in 2023. In other words, the purchasing power of $100 in 1971 equals $12,638,180.34 in 2023.
The cumulative price increase of 13,116,040.00% since 1971, as shown on in2013dollars.com, means that the Chilean peso has lost 99.999% of its value since 1971. The peso had an average inflation rate of 24.90% per year between 1971 and today.
To keep inflation under control, the Central Bank of Chile structures its monetary policy employing a conceptual framework of inflation targets, which is complemented by a floating exchange rate regime.
The bank aims to protect the value of the national currency, the peso, aiming at keeping inflation stable and low.
The exchange rate between the UF (Unidad de Fomento) and the Chilean peso is constantly adjusted for inflation so that the purchasing power of the Unidad de Fomento remains almost constant daily during low inflation.
While the Chilean peso has experienced high inflation rates in the past, the Central Bank of Chile has implemented measures to keep inflation under control and protect the value of the national currency.
Chilean Peso
Chilean peso banknotes feature iconic figures and landscapes, each with unique designs and colors to represent different denominations:
1,000 pesos
1,000 pesos: Displays Ignacio Carrera Pinto’s portrait on the obverse and the Torres del Paine National Park on the reverse. It includes details like a transparent window, watermark, and raised designs for the visually impaired.
2,000 pesos
2,000 pesos: This note has a lilac and brown color with Manuel Rodriguez Erdoyza’s portrait on the obverse and the Iglesia de los Dominicos illustration on the reverse.
5,000 pesos
5,000 pesos: Features a pink and blue underprint with Gabriela Mistral’s portrait on the obverse and La Campana National Park with an owl on the reverse.
10,000 pesos
10,000 pesos: Comes in blue, showcasing Arturo Prat’s portrait and the Copihue design on the obverse, with the Alberto de Agostini National Park illustrated on the reverse.
20,000 pesos
20,000 pesos: This highest denomination is brown and orange, depicting Andres Bello’s portrait on the obverse and the Salar de Surire Natural Monument with flying flamingos on the reverse.
Each banknote is carefully designed to reflect Chile’s rich history and natural beauty, incorporating elements like national symbols, notable personalities, and significant landmarks, making them not just a means of transaction but also a tribute to the country’s heritage.
Currency Usage in Chile
The Chilean Peso (CLP) is the official currency of Chile and is widely used throughout the country. It is essential to have some Chilean pesos with you when you are traveling in Chile, as many businesses and vendors do not accept foreign currencies.
Is USD accepted in Chile?
While USD is accepted in some tourist areas, it is not widely accepted in Chile. You may find some vendors accepting USD, but it is always better to have Chilean pesos with you to avoid any inconvenience.
It is worth noting that the exchange rate for USD to CLP varies depending on the exchange rate and the location where you exchange your currency. It is recommended to exchange your currency at a reputable exchange house or bank to get the best exchange rate possible.
In addition to cash, credit and debit cards are also widely accepted in Chile. However, it is always a good idea to carry some cash with you, especially when traveling to remote areas where credit card machines may not be available.
Exchanging Currency in Chile
If you’re planning a trip to Chile, you’ll need to exchange your currency for Chilean pesos. Here’s what you need to know about exchanging currency in Chile.
Where can I exchange Chile currency?
Exchanging currency in Chile is relatively easy, and you have several options to choose from. You can exchange your currency at banks, exchange offices, and ATMs.
Banks usually offer the best exchange rates, but they may have limited hours of operation. Exchange offices, also known as “casas de cambio,” are widely available and offer competitive exchange rates.
However, it is essential to be cautious when exchanging currency at exchange offices, as some may charge high fees and provide unfavorable exchange rates.
ATMs are another option for exchanging currency in Chile. Most ATMs in Chile accept international credit and debit cards, and they offer competitive exchange rates.
However, it is essential to check with your bank before traveling to Chile to ensure that your card will work in Chile and to avoid any unexpected fees.
What to know before exchanging currency in Chile
Before exchanging currency in Chile, there are a few things you should know. First, it is essential to have clean and undamaged US dollars when exchanging currency in Chile.
Merchants and exchange offices may refuse to accept damaged or torn bills, and some may not accept US$100 bills due to past problems with counterfeiting. It is also essential to avoid exchanging currency at the airport or major hotels, as they often offer unfavorable exchange rates.
Second, it is essential to be aware of the current exchange rate when exchanging currency in Chile. You can check the current exchange rate online or at exchange offices. It is also essential to be aware of any fees or commissions that may be charged when exchanging currency.
Finally, it is essential to keep your exchanged currency safe when traveling in Chile. It is recommended to carry only the amount of cash you need and to keep your cash and cards in a secure location, such as a money belt or a secure bag.
Overall, exchanging currency in Chile is relatively straightforward, but it is essential to be cautious and informed before exchanging your currency.
Choosing Between USD and Chile Currency
When traveling to Chile, you may wonder whether to use US dollars or Chilean pesos. Here are some factors to consider when making your decision.
Exchange Rate
The exchange rate between USD and Chilean pesos can fluctuate. It’s important to check the current rate before making any transactions. You can use online currency converters such as Wise or XE to get an idea of the current exchange rate.
Convenience
While US dollars are widely accepted in some tourist areas, it’s generally a good idea to have some Chilean pesos on hand for smaller transactions. You can exchange your USD for pesos at banks or exchange bureaus. However, it’s important to note that exchange bureaus at airports and hotels may offer less favorable rates.
Fees
When exchanging currency, be aware of any fees that may be charged. Some banks and exchange bureaus may charge a commission or transaction fee for exchanging currency. Additionally, some ATMs may charge a withdrawal fee for using a foreign card.
Tips
When planning a trip to Chile, it’s wise to exchange a small amount of USD for Chilean pesos before your arrival to ensure you have local currency ready for immediate expenses.
For additional funds, utilizing ATMs is a convenient option, though you should be mindful of potential fees. To maximize your currency exchange, take the time to compare rates and fees across various banks and exchange bureaus to secure the best deal.
It’s generally advisable to avoid currency exchange at airports or hotels, as these locations often offer less favorable rates. By following these strategies, you can ensure a more cost-effective and smooth financial experience during your stay in Chile.
Cost of Living in Chile
If you plan to live in Chile, it is important to consider the cost of living. The cost of living in Chile is generally lower than in many other countries, but it can still vary depending on where you live and your lifestyle.
According to Numbeo, the cost of living in Chile is, on average, 45.0% lower than in the United States. Rent in Chile is, on average, 74.5% lower than in the United States.
A single person’s estimated monthly costs are $690.10 without rent. Prices of restaurants, food, transportation, utilities, and housing are included in the average prices of more than 40 products and services in Chile.
According to Expatistan, the cost of living in Chile is significantly cheaper. This is based on data from over 5,700 prices entered by 754 different people, with the prices last updated on January 04, 2024.
If you are planning to settle in one of the big cities such as Santiago or Concepción, you can generally expect to pay 20% to 25% more than in smaller cities such as Valdivia or La Serena, according to International Living.
You can also check the prices for 52 products in all the main cities in Chile on Expatistan. Expatistan provides a detailed breakdown of the cost of living in Chile, including prices for food, housing, transportation, and entertainment.
Understanding the cost of living in Chile is crucial for budgeting your trip. While Chile is a relatively cheap country, prices for food, transportation, and accommodation can be high, especially in tourist areas.
However, if you’re willing to venture off the beaten path, you can find more affordable options. By using local transportation, eating at local restaurants, and staying in budget accommodations, you can save money while still experiencing all that Chile has to offer.
Overall, the cost of living in Chile is relatively affordable, but it is important to consider your lifestyle and location when estimating your expenses.
Don’t Get Scammed Tips
As a traveler in Chile, you might be tempted to exchange your currency at one of the many street vendors or kiosks that offer tempting exchange rates. However, it’s important to be cautious and avoid being scammed. Here are some tips to help you avoid getting ripped off:
1. Use ATMs or banks
It’s best to use ATMs or banks to exchange your currency. They offer more reliable exchange rates and are less likely to scam you. However, keep in mind that some ATMs may charge a fee for international transactions. Check with your bank before traveling to see if they have any partnerships with banks in Chile to avoid fees.
2. Avoid currency exchange kiosks at the airport and major hotels
Currency exchange kiosks at the airport and major hotels often have high fees and poor exchange rates. It’s best to avoid them and use ATMs or banks instead.
3. Be aware of fake banknotes
Some street vendors or kiosks may try to give you fake banknotes. Always check your money before leaving the vendor or kiosk. Look for the watermark, security thread, and other security features on the banknote to ensure it’s authentic.
4. Don’t trust street money changers
Street money changers are often scam artists and should be avoided. They may use rigged calculators, give you fake banknotes, or simply run away with your money. Stick to using ATMs or banks for currency exchange.
5. Use reputable exchange services
If you need to exchange currency, use reputable exchange services such as Casas de Cambio. These are licensed exchange services that offer competitive rates and are less likely to scam you.
By following these tips, you can avoid being scammed when exchanging currency in Chile. Stick to using ATMs or banks, be aware of fake banknotes, and avoid street vendors or kiosks.
