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In 1961, after the revolution, there was the
demonetization of money in socialist Cuba. All
foreign currencies were expropriated and only
$10,000 per family was exchanged with $1,200 and the
remaining balance in a bank account.
In the 1993 Cuba live the dollarization and currency
substitution. The USD was brought in the country by
investors and Cubans living abroad. Poverty and
scarcity of money in Cuba brought the people to deal
with USD and other foreign currencies their money
having been depreciated and therefore bearing no
value on the international market. Holding foreign
money was more profitable to the Cuban as articles
were bought and sold on the black market with
foreign currencies.
By August 13 1993, the state legalized the use of
foreign currencies in businesses and at a later
opened it to the whole Cuban population. The
government thought that it would be boost the
economic condition of the country. However the
inflow of foreign currency could not back up the
funding of the Soviet Union.
The Cubans were afraid to deposit their foreign
money and savings in the banks out of fear of
confiscation of the socialist government.
Four different currencies circulated in Cuba before
2004, the last one being the Euro. November 2004 saw
another picture in the Cuban currency with the
Convertible Cuban pesos and Cuban pesos became the
only money accepted. The Cuban pesos were limited to
the streets transaction like drinks, food, public
transports and second hand materials. All the
foreign currencies the Euro and dollars became
chargeable and were no more in free circulation on
the Cuban market. The exchange of the USD was
charged with 10 % tax to both nationals and
foreigners. In 2005, all the currencies were charged
with 8 % tax. The USD became then 18% chargeable tax
(that is 10 % of 2004 plus 8% applied to all foreign
currencies).
80.42 CUC= 100 USD
100 CUC = 24 Cuban pesos
The exchange rate is according to the international
monetary market.
CUC are available at the airport and various places
in Cuba namely at CADECAs, the Official exchange
houses or any local bank.
In Cuba, all business establishments deal with the
CUC. In tourist resorts and beaches, Euros are still
accepted.
All credit cards except the United States ones are
not accepted in Cuba and they can be cashed at ATMs.
No fees are charges when exchanging CUC to USD. It
should be stressed that Cuban earning and dealing
with foreign currencies are better off that the
professionals. For example the low skill worker in
the tourist resort is wealthier than the teacher or
doctor.
By late 1999, 1 USD= I CUC or $1 pesos on the
official rate and on the black market, the $
21pesos= 1USD.
USD= US Dollar
CUC= Convertible Cuban Pesos or Cuban Dollar |
