The local currency is the Ariary and its exchange rate is flexible. For your information, a euro was equivalent to 3,638 Ariary on October 8, 2015.
We highly recommend you to exchange your currency only in an authorized center, at your hotel or in a bank upon arrival.
VISA credit card is the most accepted in the country. You can withdraw cash in all the main cities of Madagascar with it.
Many places do not accept credit card. Thus we advise you to always have with you some local currency, especially for your craft shopping throughout the journey and for tips.