Everything You Need to Know About Portuguese Currency

Portugal is a country with a rich history and culture - and the Portuguese currency reflects this. Besides that, Portuguese nature and cities are spellbinding. So, it's no wonder why this country is such a popular tourist destination.

If you are a history or currency aficionado or are planning a trip to Portugal, you should read this article to learn everything you could wish to know about the previous currencies used in Portugal as well as its current official currency. So let's start with the basics.

What Currency Is Used in Portugal?

As one of the Eurozone countries, the euro is the single currency that is used in Portugal. Portugal was one of the first countries to adopt the euro when it replaced its national currency - the escudo - on the 1st of January 1999.

Note that the escudo was still accepted beside the euro before it was phased out of circulation on the 28th of February 2002. The official monetary unit of the European Union, the euro is represented by the currency code EUR and the symbol €.

In Portugal, you’ll typically see prices written with the currency sign following the numerals, as in 15€. One interesting thing we should mention is that in Portugal, you'll notice that the uses of the comma and decimal point are reversed - decimal points are used in thousands, for example, €12.000 instead of €12,000, while you’ll find €2.30 written as €2,30.

​​History of Portuguese Currency: the Escudo

The history of Italian money is rich, and Portugal is no different. The escudo was the Portuguese currency before the adoption of the euro. But before that, the currency of Portugal was the real. The first real was a silver coin and it was introduced in the 1380s.

During the ages, the exact value and composition of real coins changed a lot, too much to be discussed here. But what is interesting is that real (the Portuguese plural for real is réis) coins had multiple denominations - 1,000 reals were one milréis and 1.6 milréis were one gold escudo.

So escudos were initially gold Portuguese coins that were effectively a denomination of the real. These gold escudos were minted from 1722 to 1800. The first paper banknotes were issued in Portugal in 1847 by the Banco De Portugal (the central bank), still denominated in reals. 

Then, in 1911, the escudo was introduced or reintroduced (depending on how you interpret it) as the official currency, replacing the Portuguese real at a rate of 1000:1. However, the escudo’s value fell after 1914 and was then pegged to the pound sterling in 1928

In 1940, the pegged was changed to the US dollar. During World War II, as Portugal was a neutral country, Nazi Germany took an interest in Portuguese escudos and aimed to make purchases in Portugal and several other countries through Swiss banks.

Later in the 20th century, the value of centavos, the former monetary unit equal to 1/100 escudo, saw a significant decline. As a result, Portugal withdrew the centavos coins in the 1990s. Finally, it introduced the euro as the new Portuguese currency on the 1st of January 1999, but the country provided a transitional period until the 1st of January 2002.

In the meantime, the euro existed only as “book money” until the country introduced the euro banknotes and coins on the 1st of January 2002. On the 28th of February 2002, the Portuguese escudo was completely withdrawn from circulation, with the euro becoming the official currency of Portugal.

Understanding The Euro

You may already be familiar with euro coins and banknotes since the euro is the second most traded currency in the world. But let's provide a short overview, as it is the official Portuguese currency.

Currently, coins in circulation in Portugal come in denominations of €0.01, €0.02, €0.05, €0.10, €0.20, €0.50, €1, and €2. Every coin shares one common side with the numerical value of the coin and a map of the European Union, whereas the reverse side features a national design. In Portugal, the coins have the coat of arms, royal seals, and castles of Portugal.

Produced by the European Central Bank, the euro banknotes are homogenous throughout the eurozone. The banknotes are available in denominations: €5, €10, €20, €50, €100, €200, and €500.

Note that larger banknotes are difficult to use because many smaller businesses refuse to accept them. The €500 banknote is rare, so you likely won’t even come across it during your Portugal adventure.

Note: Euros can be traded across the entire eurozone regardless of their origin.

Portugal: a Cash-Centric Country

Whether you’re a tourist, collector, or expat, you’ll see cash money spent in Portugal. Although credit and debit cards are accepted, Portugal is a cash-centric country. That’s especially true for cities other than Lisbon and Porto.

How to Carry Cash in Portugal

Once in Portugal, it’s a good idea to keep smaller banknotes and coins with you. That’s particularly true for smaller cafés and shops, as you may have an issue when trying to pay with larger denominations.

It may be normal in the US to break large banknotes by making a small purchase, but it is uncommon in Portugal. If you have no other option, consider buying something at a busy restaurant or a chain store because they will be more likely to help you.

How to Get Cash in Portugal

Portugal has ATMs along the city streets, at the airport, and at banks. But try to avoid exchanging USD for euros at airport kiosks, as you are likely to get bad exchange rates. Smaller towns will also have several ATMs.

When visiting Portugal, keep an eye out for ATMs because regardless of where you go in the country, you’ll need cash. Depending on your home country and bank, you may never see a familiar ATM in Portugal, but there are options, such as Multibanco ATMs, that work like any ATM in the US.

And keep in mind that in Portugal, the standard ATM limit is typically €400 per day, but sometimes, an ATM may limit you to €200 per withdrawal. In that case, try making a second withdrawal to get the €400 limit.

How Much Money Do You Need in Portugal?

Consumer expenses in Portugal are considerably lower than in the US, UK, and other larger EU countries. Here are some of the prices you may encounter in Portugal: 

• €50 to €100 for a double room in a mid-range hotel

• €1.50 to € 2.50 for a cup of coffee

• €22 to €40 for a dinner at a nice restaurant

• €3 to €8 for entry to a museum

• €24 for a train ticket from Lisbon to Porto

Is It Safe to Carry Cash in Portugal?

Portugal is one of the safest countries in Europe and among the safest countries in the world. Since crime rates are low, pickpockets will likely be the only issue in popular tourist areas. That being said, as you would in any city, just keep an eye on your bag, and you’ll be fine.

3 Tips for Exchanging Money in Portugal

• Discover the mid-market rate beforehand: The mid-market rate refers to the true exchange rate with no hidden fees. Before your trip, use an online currency converter to ensure you get a fair rate when exchanging Portuguese currency.

• Choose to pay in Portuguese currency: ATMs offer to pay in your currency, causing you to pay more than you have to. That said, always choose to be charged in local currency when withdrawing from ATMs. This way, you will get the best rates available and reduce your expenses.

• Don’t exchange currency at airports and hotels: Currency exchange desks at airports and hotels typically have the worst rates available and may charge hidden fees, so avoid this alternative if you want to save some money. You may also want to avoid shady exchange kiosks as there you might come across fake money.

Buy Portuguese Currency Before Your Trip

The euro, the second most traded currency in the world, has been the nominal Portuguese currency since the 1st of January, 1999. However, it only fully replaced the until-then Portuguese currency - the escudo - three years later, on the 28th of February, 2002.

One of the best ways to exchange dollars for euros is to do it before you even enter Portugal because this allows you to buy it at more competitive rates. And why not order your currency from the comfort of your home?

At US First Exchange, you can order euros and many other currencies, including exotic ones such as the Iraqi dinar or Vietnamese dong, at competitive rates. And we’ll deliver them right to your doorstep. By exchanging your money before your trip, you’ll have more peace of mind, allowing you to focus on planning your exciting Portugal adventure.