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The Cuban peso ( ISO 4217 code: CUP) is one of two official currencies in use in Cuba. It has no official value outside the country, and is used almost exclusively by residents; for many years, the United States dollar (USD) has been used by tourists and for more 'luxury' items, but this is now being replaced with the Cuban convertible peso (CUC). As of October 2004, there are 26 Cuban pesos to 1 Cuban convertible peso, which is equivalent to 1 US dollar.1 Two parallel currencies
The communist economy of Cuba, in combination with US sanctions and other factors, has led to a confusing system of two official currencies, each of which is used under different circumstances. The main currency for local citizens, used mainly for buying essential food-stuffs, remains the Cuban peso. But this currency has no official international value, so to encourage hard currency to enter the economy after the collapse of the Soviet Union, and the subsequent contraction of the Cuban economy, the US dollar was made legal tender in 1993. As it is internationally traded, tourists could buy dollars in their own countries, and Cuban exiles could send them directly to their relatives.
The dollar thus became the currency associated with more "luxury" goods and services, such as cosmetics, and even non-essential food and drink. Shops selling basics, like fruit and vegetables, generally only accept the Cuban peso, while "dollar shops" sell the rest. Confusingly, dollars are sometimes referred to colloquially as "pesos", with which currency is meant being understood from the context.
Government efforts to lower subsidies to unprofitable enterprises and to shrink the money supply caused the value of the peso to rise from 120 to the US dollar in the summer of 1994 to 21 to the dollar by the end of 1999.
2 Banning the dollar
On October 25October 25 is the 298th day of the year (299th in leap years) in the Gregorian Calendar, with 67 days remaining. Events 1415 The army of Henry V of England defeats the French army at the Battle of Agincourt 1662 King Charles II of England sells Dunkirk to, 20042004 is a leap year starting on Thursday (the link is to a full 2004 calendar), and has also been designated the: International Year of Rice International Year to Commemorate the Struggle against Slavery and its Abolition Elections are to be held in 73 co, Cuban president Fidel CastroFidel Alejandro Castro Ruz (born August 13, 1926) has ruled Cuba since 1959, when, as part of the 26th of July Movement, he helped overthrow the government of Fulgencio Batista and turn Cuba into the first socialist state in the Western Hemisphere. He hel announced that the US dollar would be removed from circulation in Cuba, in response to renewed sanctionSanction is an interesting word, in that, depending on context, it can have diametrically opposing meanings. Words like this are called contronyms. A judge may "sanction" a party during a legal proceeding, by which it is meant that he imposes sanctions (s enacted by the US government. In its place, the Cuban convertible peso – familiarly known as the chavito – would be used, and Cubans had until November 8November 8 is the 312nd day of the year (313rd in leap years) in the Gregorian Calendar, with 53 days remaining. Events 1519 Hernan Cortes enters Tenochtitlan and Aztec ruler Moctezuma welcomes him with great pomp as would befit a returning god. 1520 Stoc, 20042004 is a leap year starting on Thursday (the link is to a full 2004 calendar), and has also been designated the: International Year of Rice International Year to Commemorate the Struggle against Slavery and its Abolition Elections are to be held in 73 co to exchange existing US currency; this deadline was later extended to November 14November 14 is the 318th day of the year (319th in leap years) in the Gregorian Calendar, with 47 days remaining. Events 1800-1899 1851 Herman Melville's novel Moby-Dick is published in the U. by Harper & Brothers, New York after it was first published on. After that date, it remains legal to hold and exchange US dollars, but there is a 10% commission, or surcharge, imposed during the exchange; there is no surcharge for converting any other foreign currency to the convertible pesos.
This is part of a wider move to encourage currency from other parts of the world, particularly Europe, into Cuba, as well as granting more "financial independence" from the US. The surcharge on US dollars means tourists are encouraged to bring European currencies instead, and the main tourist areas now also accept euroThe euro ISO 4217 code EUR is the currency of twelve of the twenty-five nations that form the European Union (and four outside it, as well as Montenegro and Kosovo), which form the Economic and Monetary Union (EMU). It is the result of the most significans in exchange for goods. One problem that the Cuban government is keen to play down, is that Cuban exiles in the US will now find it harder to send money to their relatives who are still in Cuba; the government hopes that they will simply send these remittances in an alternative currency, such as Canadian dollars, instead.
