The unit of money is the ariary. As of February 2015, 1 € is equal to 3200 Ar while $1 is 2850 Ar. Hotel and tour prices are frequently quoted in Euro, and Euro is accepted for most high-end transactions.
The currency system was overhauled in 2006, when a previous currency, the Malagasy Franc Franc Malgache was replaced at a ratio of 1 ariary = 5 francs. Confusingly, many people continue to quote prices in francs, so it is imperative to confirm the amount in ariary.
There are ATMs in most cities and towns. Visa is much more useful and commonly accepted than MasterCard, which is limited to BNI Bank and a couple of restaurants. An American Express card is basically useless.
In general the cost of travel in Madagascar is a good value at nearly every budget level. Basic beds can be found for just a few dollars even in big cities, while a meal at a hotely can easily be under a dollar. Mid-level hotels and jungle lodges generally are better values than on the African content, with high-service and beautiful bungalows available for just $50 in many places. Even Tana's most expensive eateries rarely charge more than $10 for a main.
Shoppers will find much to buy in the country. Spices, such as vanilla, are a great souvenir and a great value. Vanilla is about €2 for 10 pods, compared to €3 for 2 pods in Europe.
An exception to all of this is transportation, which can be ruinously expensive for the casual traveler. Air Madagascar charges tourists double on all tickets unless you flew into the country on the airline which means that round-trip tickets to anywhere in the country average $600-700! Limited public transportation means that the only alternative to a taxi-brousse which can be erratically scheduled or not available in many areas is a private car or boat hire. Expect to pay 200,000 Ar or so a day for a car, fuel and a driver's accommodation and even more if travelling by sea.