Cuba Confirms Elimination of Hard Currency CUC

HAVANA TIMES — The point man of the Cuban economy, VP Marino Murillo, confirmed Friday that the Cuban Convertible Peso (CUC) will be eliminated in the process to reestablish a one-currency system on the island. No date or timeline was given for its disappearance.

The hard currency CUC, pegged to the US dollar, joined the regular Cuban peso (CUP) in the harsh post-Soviet years of the 1990s, as a second island currency. Returning to a one-currency system is now seen by Cuban president Raul Castro and most economists as necessary.

The monetary unification plan, announced last October, will bring the CUC out of circulation, said Murillo, considered the “czar” of economic reforms, noted dpa news.

Cuba has lived with two currencies since 1994. The Cuban peso (CUP), in which wages and pensions are paid, and the US dollar equivalent, the Cuban convertible peso (CUC), with an exchange rate 24 times that of the CUP.

The reform “will leave the CUP as the lone currency and gradually phase out the CUC,” Prensa Latina quoted Murillo saying during a plenary session of the Cuban Parliament on Friday.

Murillo, 52, said there would be guarantees “for those who have funds and bank accounts in CUC,” reported PL.

The announcement of the reform, considered by experts as extremely complex, caused concern among some sectors of the population who have savings in CUC, often saved in cash at home.

Murillo also reiterated words of President Raul Castro, according to which the island ruled out “shock therapy” in the implementation of the reform.

The elimination of the dual currency has been often mentioned as necessary for the market adjustments that Raúl Castro began several years ago. Experts believe that such a reform is key to the recovery of the Cuban economy. Implementation of the return to a single currency could take up to two years.

“If we don’t manage to put our monetary system in order, it is very difficult to make progress on other things,” Murillo told the Cuban legislature.

The Cuban parliament is holding is second brief session of the year, scheduled to end on Saturday with a keynote speech from President Raul Castro. The legislators approved a new Labor Code on Friday without opposition.