For large Peso notes it is sometimes hard to get change (i.e. for $500 or $1000-notes), so always carry some loose change around. You will also need it frequently for tipping people.
Mexico’s Peso is free-floating on the currency markets. Since the last major devaluation in 1995, the Peso has been slowly devaluated against the US$, but has become a lot more stable than before. You can import and export as many Pesos as you like.
If you are in an unsafe neighbourhood always limit the amount of cash you carry on you, especially in Mexico City where getting robbed a couple of times is part of an average life experience. There are also frequent reports of people getting hijacked and forced to withdraw money at the nearest ATM with their credit or debit cards, but these assaults are less common than a direct robbery of cash.
Currency exchange in Mexico
You can change currencies at Mexican banks (bancos), exchange houses (casas de cambio) or hotels. US-Dollars, Canadian Dollars, Euros and Pounds Sterling are accepted almost everywhere. Banks and exchange houses normally do not charge a commission for currency exchange, instead making their money on the spread between the exchange rates for buying or selling Mexican Pesos. Banks and exchange houses usually offer similar exchange rates, while hotels often have less favourable rates. If you change money at a Mexican airport, you are likely to get similar rates as you would in the city centre.
Besides the exchange rate, you should also consider the time you want to spend on your currency exchange. Changing currencies at Mexican banks can be a rather frustrating experience. Many banks have a long wait, some only change money during certain hours of the day, and others only change currency if you have an account with them. If you want to exchange a traveller’s cheque, procedures can become even more complex and time-consuming. After having spent more than an hour at the bank maybe you would have preferred to have visited the exchange house next door; in spite of it’s slightly less favourable rates.
Traveller’s cheques in Mexico
Traveller’s cheques can be exchanged in most Mexican banks (at least in theory) and some exchange houses at the daily exchange rate. If you want to make sure that your traveller’s cheques are widely accepted, your best bet are cheques from well-known brands such as American Express denominated in US-Dollars. When exchanging a traveller’s cheque you should not be charged any fees in Mexico. If you are asked to pay a fee, look for another place.