![]() T he CUC ( Cuban Convertible Peso ) has gone and the country now has a single currency economy. The government has already planned an increase in wages, however, it is difficult to predict how this revolutionary change will evolve.Īre you looking for South American companies to work with? Find business partners in Latin America with the Globartis b2b portal.More than year has passed since the Cuba got rid of its dual currency system. The devaluation of the Cuban currency will bring even primary goods more expensive. We do not have to forget that Cuba imports large quantities of food from outside. On the other side, a strong devaluation of the currency will decrease the purchasing power of Cuban citizens (that already live on a low income). Moreover, It will also make Cuba a more attractive place for foreign tourists and foreign investors (especially if the economy is more open to private individuals). The Cuban currency should suffer a strong depreciation.įrom one side, it will be positive from a business perspective.Ĭuban companies (owned by the state) should improve the export. It is not easy to predict what the consequences of this transition will be. So the government decided to eliminate this complex dual-currency system starting from 2021. The crisis has exacerbated an already present situation. In the black market, USD Dollars were traded at a much higher price than the official $ 1 = 1 CUC. In practice, however, there is a black market in which foreign currencies are accepted (especially US dollars). ![]() In theory, economic activities (shops, restaurants, etc.) could not accept payments with foreign currencies. In Cuba, it is possible to pay only with local currencies by law. The bad economic situation has had deep consequences on Cuban currencies. The sector was already in trouble, and the global pandemic has further accentuated the crisis. Tourist sector crisis due to the pandemic.Stop cheap oil from Venezuela (partly linked to US sanctions).Particularly, it focused on: blocking US tourism to Cuba, reducing remittances from Cubans working in the United States, and blocking imports of alcohol and tobacco from Cuba (read Rum and cigars). The United States has lifted several sanctions, among other things, US citizens have been allowed to travel to Cuba for tourism.Ī few years later, President Trump reintroduced new sanctions on Cuban products. In 2014 Obama and Fidel Castro embarked on a path to normalize relations between the two nations. Why was this choice made? What will the consequences be?įirst of all, Cuba has been experiencing a severe economic crisis in the last two years due to various causes, in particular: Ĭuba and the United States of America have been in a conflicting relationship since the 1960s. It is mainly used by local people for everyday transactions. The other currency, the Cuban Peso (CUP), continued to circulate. The Cuban Convertible Peso (CUC) is the currency used mainly by tourists. The new currency was pegged with the USD dollar ( 1 CUC = 1 USD). The dual currency system has been introduced in 1994 with the creation of the Cuban Convertible Peso (CUC). The Soviet Union was the largest importer of Cuban products, but also the principal exporter, also providing products at controlled prices (such as petrol).ĭue to the crisis of that period, the Cuban government allowed the circulation of American dollars on the island, which were used by tourists. Unlike other communist countries, such as China or Vietnam, it has not yet opened up the economy.Īfter the fall of the Soviet Union (1991), there have been some years of severe economic crisis, known as the “Special Period.” The Cuban Peso (code: CUP) Why are there two currencies in Cuba?įirst of all, let us remember that Cuba is a communist country.In Cuba, there are two parallel currencies, both official and regularly used simultaneously, which are: Anyone who visited Cuba surely knows of the Cuban currency system, which is very particular.
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