According to the head of the economic reforms Marino Murillo
HAVANA TIMES — The Cuban government said today that the planned elimination of the dual currency on the island will not cause a price increase or affect the “purchasing power” of the population, reported dpa news.
The elimination of the dual currency prevailing on the island since the 90s “will have no effect” nor will there be “price increases for these causes,” said Marino Murillo, the official in charge of Cuba’s program of market reforms.
Speaking to the Cuban parliament meeting in Havana, the so-called “czar” of the island’s economic reforms said: “People’s purchasing power” (already one of the lowest on the continent) “will be respected.”
Cuba has two currencies since 1994. The Cuban peso (CUP), which state salaries and pensions are paid, and the convertible peso (CUC), comparable to the dollar and whose exchange rate is 25 times that of CUP. The hard currency is mostly used in the tourism sector and in stores where imported products are sold, including many basic food products.
Raul Castro’s government announced in October 2013, a “time table” to eliminate the dual currency, considered by experts as a key reform needed to boost the recovery of the Cuban economy. The change provides for the elimination of the CUC.
The announcement of the reform caused some concern among sectors of the population who have savings in CUC, often saved in cash at home.
Not the solution in itself
Murillo admitted that the monetary reform in itself will not solve the problems of the Cuban economy, mired in a chronic crisis for over two decades, after the demise of the Soviet Union and the socialist bloc.
The reform alone will not solve “the problems of the economy or solve the purchasing power of wages,” said Murillo, quoted by Prensa Latina. Average wages in the large state sector on the island are around 20 CUC a month.
Cuba recently lowered its economic growth forecasts for 2014 from 2.2 initially expected to 1.4 percent, due to a “higher than expected slowdown.”
President Raul Castro today chaired the second plenary session of the year of the Cuban legislature. Nearly 600 delegates of the National Assembly are meeting behind closed doors on Saturday with the focus of the gathering being economic and budgetary matters.
It is also expected that Raul Castro will close the session with a speech that will be partially or totally published in the coming days.
The last time the full parliament met was in late March when it unanimously approved a new foreign investment law, which seeks to kick start the ailing economy with the arrival of capital from abroad.