HAVANA – Cuba will end its dual currency system and have a single unified exchange rate of 24 pesos per dollar from January 2021. There is the Cuban peso and the Cuban convertible peso, known as the CUC.
The announcement was made by Cuban President Miguel Diaz-Canel and Raul Castro, the first secretary of the Communist Party of Cuba, last Thursday on the government’s national TV and radio stations, that they are unifying the country’s double currency system by getting rid of the Cuban Convertible Peso, or CUC, which was pegged to the U.S. dollar.
Starting January 1, 2021, the Cuban peso will be the country’s only valid currency after more than 25 years of having two national currencies.
Cuba’s two-currency system dates back to 1994 which at the time was said to have been created as a method to deal with a weak economy.
Diaz-Canel said “the unification is not a magic solution to the island’s economic problems, but it will address inefficiencies.” The Government revealed that the unification of the two currencies is part of a wider effort to reform the country that will also see the modification of prices, salaries and subsidies.
Streamlining the currency system will put the country on a sounder footing “to go ahead with the transformations that we need to update our economic and social model,” Diaz-Canel said.
In the Official Gazette announcing the new rules, the government said “the value of the Cuban peso will be determined by the Central Bank of Cuba and the exchange rate will be “published daily on its website.”
The Cuban economy has been hurt by the decline in tourism revenue since the COVID-19 pandemic began. The U.S. embargo has already been taxing on the country.