Public radio's "Marketplace" program (aka Stateplace) had an interesting story about money in Guatemala. An excerpt:

Brett Neely: Guatemala's currency is called the Quetzal, named after the national bird. The biggest bill is 100 Quetzals -- a little more than $13.

When you get money from an ATM, you wind up with a big stack of 100s. And as tourists soon discover, a hundred Quetzals goes a long way. Maybe too far.

Joel: It's been virtually impossible to purchase anything with a hundred-Quetzal bill.

Dana: They always seem upset when you hand them a hundred.

Esteban: If I know I need to make some smaller purchases in the afternoon, in the morning, I'll get something really random from a large store so I can break my change down.

The lack of change is an inconvenience for tourists. But it's also a business problem for Guatemalans and for other Central and South Americans.

At a small store in the highland city of Quetzaltenango, owner Elimira Reyes Osorio tells me she's lucky if she's got change for two 100-Quetzal bills -- about $26 bucks. If she burns through that, she can only make the sale if she knows the customer.

But the reporter never considers why Guatemala has difficulty putting enough small bills in circulation. My guess--the small bill problem results from a monopoly on currency issue or some perverse regulations in the banking system.

I've emailed an acquaintance in Guatemala. I'll update if he sends back something interesting.

ADDENDUM: Here's the reply I got from the friend in Guatemala:

Yes, the story is true and your hunch is "right-on-the-money". Last year -nearing the Christmas season- the Banco de Guatemala (our central Bank) acknowledge to the embarrassment of it's authorities that it had run out of cash (due to bad planning, really). You can imagine that a large portion of Christmas sales in Guatemala are transacted in cash so the ineptitude of the central bank caused a mini-crisis specially in rural areas. The Banco de Guatemala did not acknowledge this but I know that they were purchasing Q20 bills for up to Q40 and Q50 (!!!). Somebody made a bundle out of this mess.