Cuba is to eliminate a currency pegged to the US dollar as part of a move to end its unique double-currency system, which had become a symbol of economic inequality to many islanders, Cuba’s top economic official said on Friday.
Tourists currently use a convertible peso roughly equal to a US dollar while most Cubans are paid in ordinary pesos worth about US$0.04. Many goods are easier to find in government stores that exclusively accept convertible pesos, a mechanism designed to keep the flow of the special currency under government control.
The dual system has created special privileges for Cubans who work in tourism, and resentment among those who do not.
The government of Cuban President Raul Castro pledged in October to gradually unify the two currencies in order to prevent shocks like spikes in inflation.
On Friday, Cuban Vice President Marino Murillo told parliament that the peso pegged to the US dollar, known as the CUC, would eventually disappear, the first time the government has explicitly said that.
“People who have the convertible Cuban peso (CUC), whether in the banks or kept at home, will not lose any financial capacity when the dual monetary system is eliminated,” Murillo said.
The double monetary system was established in 1994 amid an economic crisis sparked by the fall of the Soviet Union, which heavily subsidized Cuba for decades.
It was designed to allow Cuba to receive hard currency needed for international trade from the outside world while insulating the rest of the economy from market influences.