The Money Market in Urubamba

It's generally accepted that access to money is key to development, but many Peruvians are too poor to even bother opening a bank account. In Urubamba, the vast majority of shops do not accept credit cards; the exceptions being the high-end hotels and restaurants. Tightening the money supply even further is people's almost universal reluctance to give change.

ATM's in Peru generally dispense S/50 and S/100 notes, worth about $17 and $34 respectively. However, a bottle of water or a ride in a mototaxi would only cost one sol in Urubamba (unless you get the tourist price.

Because the land is so fertile, many people are subsistence farmers, in addition to whatever odd-jobs they may do around town. (This is one reason it's been challenging to get artisans to show up at the market consistently.) As a result of the weak trade, many artisans make less than S/100 per month or $1 per day in cash. It's easy to understand why locals would have difficulty making change for large notes, but the slow velocity of money circulation is yet another impediment to economic development.