Currency Used in Cuba by Tourists Disappears on Jan. 1

The CUC bites the dust as the US Dollar gains ground

This is the regular Cuban pesos that will survive beyond January 1, 2021. Photo Jorge Luis Baños / IPS

By Circles Robinson

HAVANA TIMES – President Miguel Diaz-Canel announced Thursday the end to one of Cuba’s two currencies will take place on January 1st. He spoke on national TV with the all-powerful Raul Castro, head of the Communist Party, silent at his side.

The surviving currency is the regular Cuban peso (CUP) and the loser is the CUC, the currency tourists used.

The big winner is the US dollar which will start out fixed at 24 pesos to 1 USD, said Diaz-Canel. The CUC substituted the USD back in 2004, ordered by Fidel Castro.  The catch is the government doesn’t sell dollars, needed for basic product shopping in its retail stores. On the street, the rate currently ranges from 40 to 50 pesos for one dollar.

The government has put together an economic “update” package of over 200 measures which will gradually come into effect. Foreign investors, certain state companies and their executives, and Cubans with capital will be the big winners with the new rules. As to the general population, the government assures the measures will stimulate greater production and purchasing power.

The CUC which will stop circulating on January 1, 2021.

What currency will tourists use?

It’s not known whether visitors to Cuba will use cash dollars at hotels, restaurants and stores or the regular pesos.  If it’s the latter, and they have to sell their USD at the 24 to 1 rate, the purchasing power would be greatly reduced. This because at 24-1 the peso is highly overvalued, something even top government economists previously stated.

The government has announced an up to 500% increase in the minimum wage in the State Sector, which controls over 85% of the economy.  How that will be financed in a time of economic crunch and depressed production of goods is still a mystery. The implementation date of the wage hike is still not known.

Likewise, when that takes place, most subsidies will be dropped on rationed products, which many depend on. Whether the net result will mean an improvement in people’s purchasing power remains to be seen.

The fate of pensioners, who will also receive an increase, is still unknown.  They currently receive an average equivalent of 10-12 USD in pesos. To reassure people, the government repeatedly insists that nobody will be left to their fate in Socialist Cuba.

Diaz-Canel noted the economic “update” was first approved by the Communist Party in 2011 and then reapproved in 2016.  He said the government would begin issuing detailed information on the policy changes in the coming days. He warned that undesired inflation may result, but said strict price controls and stiff punishments are planned.

Read more news from Cuba here on Havana Times.

8 thoughts on “Currency Used in Cuba by Tourists Disappears on Jan. 1

  • I have approx $100.00 CUC left over from my last trip to Cuba in Nov. 2019 and was planning on going again this past November but COVID 19 happened. I would gladly give them to someone that is traveling before they expire, (June 2021?) or mail them to a Cuban citizen if anyone can give me a name and address.

  • Michael I have tried as you have To just bring a little Joy to the Children of Cuba & the only thought that makes Cuban Controls understandable for a Canadian that has Learned from Cubans, Cuban Children Start to be taught around 12 yrs. of age that the Tourist is the Enemy that enters Cuba to Exploit there People & Country, This Controlling of Children I have Watched Happen over a 5 yr. Relationship with Cuba. Yes Michael Most Canadians just want to Show Cuba we Care for them with Gifts to Bring Joy to a Nation that Can Not & will Not Permit our interference that will Create Change, Upsetting the Controls Cuban Government Demand. Yes Government There all for excepting Canadian Money as the Government in the End will Have all of that from the Children. Gifts of Food Clothing ect, only Benefit the Children & there Family & Friends. We Canadians Made to Look Bad as we Provide More then there Government will Not Permit Children to Learn & Except that Most Canadians truly Care for Them. Justine T. words No One is Truly Safe Until We all are Safe, The World Over. Think of that Meaning & are the Cuban Children Truly Safe. Positive Thinking Will Bring Joy To The Children of Cuba one day. When Taught To Swindle & Scam The Tourist Enforces Government Controls over a Nation.

  • As a Canadian Tourist, I am extremely frustrated by the severe penalties and confiscation of brining “Gifts” into Cuba. I have tried and continue to try, to bring items like T shirts, school supplies, arts and crafts supplies, even note books or innocent comics into Cuba as gifts to children and children only!
    Canada supplies so much product to Cuba in trade and assistance of basics.
    Why penalize tourists trying to be kind to Cuban individuals.
    I’m not selling, trading or bartering these goods, I’m giving them away as I travel around Cuba yo obtain SMILES from children and their parents.
    No attempt to undermine your society or officials!
    My heart is full of love for Cuba, My mind is angry with the policies the state forces on tourists good people bringing children smiles!.
    Even the Cuban Embassy in Toronto won’t answer how I can bring small gifts of love into Cuba.
    This must change!
    I’m done, not coming back until policies change. Part of my travel is inducing smiles to kids. Not undermining governments or embarrassing anyone or any economy. If I brought money to hand out, they’d never know! That undermines the economy, note books and crayons for colouring certainly don’t.
    Feel free to respond. I’ll listen to government officials and anyone else.
    Canada wants to trade fairly with Cuba, but Cuba seems, on the surface, to repel a balanced trade effort outside there borders.
    Please don’t get me started on the underground economy Cubans rely on to just buy food and necessities!

  • And everyone stuck with the phony currency CUC will get burned.
    No surprise the regime wants you to get burned.

  • Sounds like massive inflation is about to hit most Cubans, and a black market for dollars will sap the peso of itS value.

  • This decision was a long time in coming. The immediate effect will be that the street value of USD wil go up. This will serve to exacerbate the ever-widening economic distance between those Cubans who have family members who can travel to Cuba with greenbacks hidden in their suitcases and those Cubans resigned to live on only the CUP.

  • One of the many details still to be explained.

  • How long will you have to exchange your CUC after January 1 or is it immediately use less.

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