Author Topic: Cuba to Scrap Two Currency System  (Read 1516 times)

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Offline Bimat

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Cuba to Scrap Two Currency System
« on: October 23, 2013, 04:18:20 PM »
Cuba to scrap two-currency system in latest reform

22 October 2013 Last updated at 14:04 GMT

Cuba is to scrap its two-currency system in the latest financial reform rolled out by President Raul Castro, official media report.

Since 1994 Cuba has had two currencies, one pegged to the US dollar and the other worth only a fraction of that.

The more valuable convertible peso (CUC) was reserved for use in the tourism sector and foreign trade.

Now its value will be gradually unified with the lower-value CUP, ending a system resented by ordinary Cubans.

No fixed timetable

The Cuban economy is almost entirely state-run and the tourism sector has boomed since the collapse of the Soviet Union plunged Cuba into economic isolation and hardship.

The two-currency system was supposed to protect Cuba's fragile economy but angered locals paid in the much lower-value CUP and denied access to goods only available for those with convertible pesos.

The policy exacerbated the creation of a two-tier class system in Cuba which divided privileged Cubans with access to the lucrative tourist and foreign-trade sectors from those working in the local economy - all-too-visibly contradicting Cuba's supposedly egalitarian society.

The council of ministers has approved a timetable for implementing "measures that will lead to monetary and exchange unification", the official Communist Party newspaper Granma said.

Unification is "imperative to guarantee the re-establishment of the Cuban peso's value and its role as money, that is as a unit of accounting, means of payment and savings", it said.

It gave no details of how quickly the change would be implemented, though Reuters news agency quoted Cuban economists as saying it would take about 18 months.

Source: BBC
« Last Edit: November 22, 2013, 08:55:29 PM by <k> »
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Offline Figleaf

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Re: Cuba to Scrap Two Currency System
« Reply #1 on: October 23, 2013, 06:50:47 PM »
Not really the first time they announce this, so it may be true this time. Notice the sub-heading "no fixed timetable". Translated into Spanish: mañana :)

Peter
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Offline Ukrainii Pyat

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Re: Cuba to Scrap Two Currency System
« Reply #2 on: October 23, 2013, 08:54:35 PM »
O en otros palabras - nunca. :-X
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Offline Pabitra

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Re: Cuba to Scrap Two Currency System
« Reply #3 on: December 04, 2014, 02:24:27 PM »
Any further news on the subject of unified currency ?

Offline chrisild

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Re: Cuba to Scrap Two Currency System
« Reply #4 on: December 14, 2014, 12:23:47 PM »
Tough to get reliable info - most sources are either from the Cuban government, or from the country that boycotts Cuba. ;)  Here is an article from AIN (Cuban news agency, in Spanish) dated 30 Sep which says they are ... working on it. 

Then again, from what I read here for example (DW, in German), quite a few stores simply accept both currencies now, at the 1-25 rate. So what costs 100 CUC can also be purchased by paying 2,500 CUP. This way lots of items and services will still be expensive (and not affordable for many), but at least a widening of that policy would do away with the need to somehow get CUC ...

Christian