Your (20th century) money is no good here

Boondoggle notes that, if you’re paying off Somali pirates, you better bring the right kind of bills.

Kenyan sailor Athman Said Mangore, who was held captive for more than 120 days by Somali pirates, says they are known to make many demands and put in place a number of restrictions.

“They sometimes say they want $208,000 exactly in $100 bills only,” he says.

“I don’t know why they make those demands. They usually also don’t like dollar bills that were printed in 2000 or the years before. If it was printed in 1999, they say: ‘This is not fit to be used in our shop’,” he adds.

The practice isn’t limited to Somali pirates. In Uganda, you have one exchange rate for $100 bills after 2003, and another for older or smaller bills. Storekeepers will refuse old money, and I don’t know why. I hear it has something to do with Middle Eastern banks, who won’t accept old or small bills. Is this a consequence of the dollarization of Gulf economies?

It’s not something I’ve seen in West Africa. You should see (and smell) the ratty bills I got in Liberia. It’s a mixture of Old Spice and fish. Lovely.

Surely a reader out there has an answer?

18 thoughts on “Your (20th century) money is no good here

  1. When I asked a couple of shopkeepers in East Africa, they told me that it was because it was more likely those notes were forgeries. I think it’s just another one of those rumours that gets started and takes on a life of its own

  2. It’s not nonsense to consider that more recent notes are less likely to be forgery. Some time from now, probably only the new 100$ design currectly in the making will be accepted:
    http://www.moneyfactory.gov
    /section.cfm/4

    See also:
    http://en.wikipedia.org/wiki/Superdollar
    http://en.wikipedia.org/wiki/Anatasios_Arnaouti

    But it’s hard to guess why they set the limit at 99. The current design dates from 96, and the recent series are the 2003 and 2001 series.
    http://en.wikipedia.org/wiki/Federal_Reserve_Note#Series_1928.E2.80.932003

  3. The last time I was in Jinja for white-water rafting, only new $20’s were accepted by the rafting company on the premise that the bank would accept old notes. Even the border officials at the Uganda/Kenya border only wanted new bills for visa purchases. If banks and the govt. don’t want old bills of higher denominations, than it makes sense why shopkeepers don’t want them

  4. @jmdesp – no, I know that older notes are more likely to be forgeries (and also more likely to be knackered, which is a more practical concern). My point was that in many cases the years that they won’t accept – and back then it could be quite arbitrary – aren’t based on solid knowledge, merely rumour.

  5. Paul’s right. Apparently there were a few forgeries of 1999 bills a few years back, so the rumor spread all over east Africa that 1999 bills are all fakes. In D.R. Congo, this expanded to 2000 series bills as well.

    Also in Congo (and Rwanda), no one will accept dollars with even the tiniest tear in the paper. Everyone says this is because “they” won’t take the money, but no one seems to know who “they” are. (It can’t be the banks, because almost no one uses the banks in eastern Congo.) I think it’s a case of perception becoming reality, so much so that the banks in Goma will actually change out “bad” $100 bills for $90 in “good” bills.

    Of course, no one has any qualms about returning your change for dollars in Congolese francs that appear to have been flushed down the toilet and put through a shredder.

  6. Yes, in my experience in certain parts of the world, moneychangers often do not accept older bills, or those that are slightly torn or creased. However you can sometimes bargain with them, to exchange at a slightly lower rate, anywhere from 2-5% lower than what you would normally get.

  7. Might it not simply be (as the poster before me seems to suggest), that the bill loses all its value when it breaks into pieces from wear, and that the value of any given bill reflects is discounted by its expected remaining lifetime.

  8. I concur with texasinafrica, in that it’s a case of perception becoming reality. But I suspect another factor that plays into it is scamming by money changers “oh, this bill has a little tear so I can only give you 90% of its value”.

  9. That only has an effect if the bill is in a really sorry state. The probability of it going to pieces is about nil for the bills they’re talking about.

  10. There was a Wall Street Journal article a few years ago on older USD bills having difficulties abroad.

  11. Right – these are not bills that would be taken out of circulation if they were in the U.S. I’m talking about bills with a tiny, tiny tear on the crease where it was folded in someone’s wallet.

  12. I encountered this in Sierra Leone as well as in many other African countries. Apparently is has something to do with forgery and the fact that Western Union (and others money transfer services) do not accept those ‘old’ bills. The said bills may have been easier to forge and apparently there were a greatly deal of fake ones floating around.
    They are pretty adament about not accepting those ‘old’ (albeit real) bills indeed.
    Sophie

  13. Hi, the same has happened to me in Indonesia (followed by a look of disgust towards me, for having those bills).
    No one then was able to explain me why…

  14. Even the big British Barclay’s bank in Kampala will only give you $80 worth of UGX for a $100 bill dated before 2000.

  15. I tried changing a 1990s $100 bill in a respectable commercial bank in the Philippines and they flat-out refused, recommending that I go to some shady money-changer around the corner. Yes, as others have said, counterfeiting and the (accurate) perception that nobody else will accept the bills are the main factors behind this.

  16. I’ve asked this question a few times around central and east Africa. I have always had problems with anything before 2002. In Sudan I was told quite specifically that it was because a smuggling ring was smashed up in Nairobi in 2001, so anything 2001 or earlier was suspect. A quick google search didn’t seem to turn up any one big sting, but maybe something played out bigger in regional press (or was concocted).

    The other explanation I heard was that it was Lebanese traders playing with the currencies – depress the value in east Africa to buy at a lower price, then send it to the Middle East.