Have you ever had the experience of handling and dealing with two currencies in the same country? If you have never heard of this before, your mind could be wondering how. As it is, most countries have only one currency.
What is the Cuban Currency?
The scenario depicted above is not true of Cuba. In the matter of currencies, Cuba can be said to be in ‘a class’ of its own. Cuba is a country with two currencies, the Cuban Peso (CUP) and the Cuban Convertible Peso (CUC). Both of the currencies are legal tenders and circulated with the consent of the Central Bank of Cuba. The scenario has been in place since the collapse of the Soviet Union.
Cuban Convertible Peso (CUCs)
This a relatively strong currency as its value is pegged to the US dollar at the ratio of 1:1. It is about 25 times stronger than the Cuban peso (CUP). It is in various denominations either as coins or banks notes. It can be exchanged with US dollars, Euros, British pounds and so forth.
Cuban peso exchange rate (CUP)
It is sometimes referred to as the national currency. It is relatively weak in value and 25 units of this currency equal one Cuban convertible peso. This is the currency that was in circulation before the Cuban convertible peso was introduced It is also in various denominations and can be accessed both in coins and bank notes. CUPs are not convertible, you cannot exchange US dollars or anything other currency to CUP, one must first exchange the foreign currency into CUC then to CUP. Are you confused yet?
How dual currencies work in Cuba
CUP is the currency that is sold by government agencies. As indicated earlier, 25 units of this currency will be offered in exchange for one unit of Cuban convertible peso. Domestic purchases by Cubans are done using this currency. Cuban workers are also paid with this currency.
Initially, CUC were mostly used to buy luxurious goods. It is also the currency that is used by tourists. The government, however, has priced all goods in dollars thus eliminate the ‘luxury goods currency’ notion.
For companies and entities maintaining books of accounts, the conversion rate of the two currencies is kept at the ratio of 1 to 1. This is in a bid to prevent Cuban peso inflation. This has however served to obscure the inefficiencies in the companies that are mostly run by the government.
Cuban money and The future of double currency
There are countries in the world that have managed to unify twin exchange rates. The Cuban government is cognizant of the fact that twin exchange rates may not be tenable long into the future. It has more than once attempted to do the unification: at least by communicating its intention over it. The government has however not made the schedules public as unifying two currencies with great disparities is challenging.
Exchange rates for the Cuban currencies
In considering this, it is important to note that none of the two Cuban currencies are not International traded currencies. Since the government owns most of the businesses and controls prices, the exchange rates are not volatile to a large extent. The financial sector is also heavily regulated and market dynamics do not have much or if any influence on the exchange rates.
Cuban currency and tourism
Tourism is one of the mainstays of the Cuban economy. Statistically, there are 3 million arrivals every year. This is attributed to the good weather as well as the various cultural attraction destinations and outstanding beaches.
Access to Cuban currency
As part of planning, visitors can prepay most of the expenses related to the tour like meals, accommodation as well as travel expenses. They then can carry with them small amounts to facilitate small expenditures during the trip.
Americans visiting Cuba can exchange dollars CUC only As noted before, the two currencies are exchanged at government agencies, caled Cadecas or one of the Cuban banks. Visitors traveling with Espíritu Travel have the advantaged of our expertise regarding Cuba.
Visitors can make their bookings with us and be assured that their trip will be well planned. With the various trips to choose from, you will see and experience the diversity of Cuba.
Our Services are personalized and we are also able customize our programs to suit your travel dates. Even if you choose when of our group trips, these groups are no more than 6 people so these allows the trip to see be flexible and spontaneous.
As such a great destination and good weather coupled with excellent customer service from us, visiting Cuba has never been easier. The natural beauty and the rich culture of Cuban are waiting for you. Book your travel to Cuba with us and you will cherish the memories of the country.