11/11/2022 0 Comments Cuba exchange rates![]() ![]() The government has declared that the two-currency system will come to a definitive end in 2016. The steps taken so far, coupled with what we know about how the Party-State operates, suggest we will continue to see the opportunistic use of multiple exchange rates, a possibility created by the monopoly that the State maintains over all economic sectors (one of the so-called “advantages” of socialism). Stronger growth is predicted for this year.HAVANA TIMES - True monetary unification will be difficult to achieve in Cuba. The Cuban economy declined 10.9 percent in 2020, according to Reuters, but began a slow recovery in 2021 with GDP growth of 1.3 percent. ![]() On August 5, an oil-storage facility at the port of Matanzas exploded and caught fire after it was struck by lightning, further disrupting Cuba’s petroleum supply. In late July, Cuban authorities announced a schedule of weekly electrical blackouts for Havana. Hit by harsh economic sanctions levied during the Trump administration, the total loss of tourism revenues during the pandemic, and now escalating import costs due to the Russian invasion of Ukraine, the Cuban government is struggling to resolve an ongoing economic crisis which has led to widespread shortages of food, medicines, fuel and electricity. ![]() Cuba unified the currencies in January 2021. The system added confusion and also made it easy for unwitting tourists to get scammed into trading their foreign currency for the less-valuable CUP. The old tourist currency was known as the Cuban Convertible Peso, or CUC, and it was worth 25 times as much as the Cuban peso, known as a CUP. That surcharge was eliminated in July 2020 during the pandemic.įor roughly 16 years Cuba worked on a dual-currency system, one for citizens, one for tourists. Cuba has a 3 percent exchange fee for foreign currencies, but in the past imposed an additional tax on dollars. The new exchange rate will also benefit tourists from the United States, Canada and Europe who will be less likely to trade large quantities of dollars or Euros for Cuban pesos on the street. Tens of thousands of Cuban families who receive remittances in the form of dollars will be beneficiaries of the new rate, although prices in the private commercial sector are likely to adjust upward as the new rate goes into effect last week. When the government was ready to sell dollars, Gil said, there would be limits on quantities individuals could purchase. Speaking on the Cuban state news show, "Mesa Redonda" (Round Table), the Cuban officials said that the exchange rate would float, and that, for now, the government would only purchase dollars at that rate, but not sell them. “Today there is a high level of foreign currency that is entering the country that is not being captured by the national financial system,” the Economy Minister, Alejandro Gil, said on August 3 during a television appearance with Central Bank President Marta Wilson Gonzalez, according to Reuters. ![]() The new rate matches the current black market exchange rate for dollars Cuban officials acknowledged that the government sought to compete with the informal market to obtain much needed foreign currency. The new rate, which will apply to other foreign currencies as well, marks close to a 500 percent increase over the 24 to 1 rate the Cuban government had set during the pandemic. Travelers to Cuba will now be able to exchange dollars at hotels, banks and currency exchange centers at an official rate of 120 Cuban pesos to the dollar, Cuban economic authorities announced last week. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |