HAVANA: Cuba has approved a plan to gradually eliminate its dual monetary system as part of reforms aimed at improving the country’s economic performance, a communique carried by official media yesterday said.
“The Council of Ministers has adopted a chronogram of measures that will lead to monetary and exchange unification,” the government statement said.
“(Unification) is imperative to guarantee the reestablishment 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. Since 1994, after the fall of the Soviet Union, Cuba has had two currencies. One is pegged to the dollar, while the other is valued at a fraction of the dollar’s value, angering the population which is paid in the latter, and complicating accounting, the evaluation of performance, and trade for state companies.
Plans to decentralise and introduce market mechanisms into the Soviet-style economy adopted by the Communist Party in 2011 under the leadership of President Raul Castro included currency unification.
The two local currencies are the peso (CUP) — in which most wages are paid and local goods priced — and the convertible peso (CUC), used in the tourism industry, foreign trade and upscale eateries and stores carrying imported goods. Neither are legal tender outside Cuba.
In a country where almost the entire economy is in state hands and prices fixed, companies must exchange dollars and CUCs with the government at the official exchange rate of one peso, while the CUC is currently valued at 25 pesos by the government at exchange offices.
Reuters
