However, most Cubans are suffering severe shortages that continue in state-run stores selling in pesos. The government is saying that this is a temporary measure, but partial dollarization of the economy will also bring a certain stability to families who receive remittances. The other option is to buy dollars illegally on the street where the peso has already suffered at least a 50% devaluation. This puts Cubans without family abroad to top up their accounts at a disadvantage for obtaining basic food and hygiene products. The government doesn’t sell dollars at any price. However, they can only be purchased with a debit card in USD.
#Cuban exchange rates series#
The Cuban government opened up a series of stores that sell consumer goods in US dollars. President Miguel Diaz-Canel said that he would leave the peso at one fixed rate, 24 CUP : 1 USD, getting rid of more favorable exchange rates in the peso’s first official devaluation ever since the Cuban Revolution in 1959. While the system helped Cuba overcome the impact of the USSR’s collapse, it also ended up covering up the real economic situation. Additionally, different joint venture companies, wages in the Mariel Special Development Zone and in transactions between farmers and hotels, had still other rates in between the other two.Ĭuba created the system as part of a series of measures to open up its economy after the Soviet Union collapsed. However, there are different exchange rates: 1:1 for state-led companies, 24 pesos for 1 CUC for the general population. Neither are traded outside out of the country. Both had the official exchange rate of 1:1 USD.
How does Cuba’s system work?įor almost three decades, two national currencies circulate in Cuba: the peso and convertible peso (CUC).
However, the reforms were put on the backburner as a result of internal divisions and bureaucracy. At that time, it was moving towards a market-driven system and closer links with the international economy. These reforms were first adopted during a Communist Party congress a decade ago. Unifying its dual currency system will try to make its centrally planned economy more dynamic, writes Marc Frank, from Reuters. Something the country has been anxiously awaiting. HAVANA TIMES – The Cuban government announced that on January 1, currency reform begins. Important points about currency reform include the devaluation which will produce inflation, and the end of government subsidies that will inevitably lead to jobs lost.