Cubans React to End of Cuba’s Dual Currency System
The unification of the two currencies is expected to be a gradual
process that could take up to 18 months.
By Francesca Trianni @frantrianniOct. 31, 2013Add a Comment
Cuba took the first step on Tuesday towards eliminating its two-tier
currency system, in a move that observers see as ending a system that
curbs trade and creates two levels of wage earners. The Communist island
nation has been slowly attempting to come out from the cold of years of
According to Cuban state media, the government plans to gradually
eliminate the dual monetary system in favor of a single Cuban peso. The
system had been in place for the last two decades, part of reforms aimed
at improving the country’s economic performance after the collapse of
the Soviet Union. The reasoning behind the two different currencies was
to protect the country’s fragile, Soviet-style economy from the
fluctuations of global markets.
Presently, most Cubans receive their salaries in the Cuban peso, or
CUP, which is used in the local economy. But the vast majority of
imported goods on the island are available only with the hard currency
convertible peso, or CUC, pegged to the U.S. dollar and used in the
tourism industry and for foreign trade. This makes the dual-currency
system unpopular with many Cubans, as they can’t purchase with Cuban
pesos sought-after imported goods sold in convertible peso.
According to government statistics, most Cubans earn about $20 a month
from their salaries. Neither peso is accepted as currency outside of Cuba.
Reuters reports that the unification of the two currencies is expected
to be a gradual process that could take up to 18 months.
Source: “Cubans React to End of Cuba’s Dual Currency System | TIME.com”