The president of Cuba, Miguel Díaz-Canel, has announced that on January 1 the Cuban convertible peso (CUC), equivalent to the dollar, will disappear as current currency, and only the peso will survive, within the framework of an expected monetary unification that it puts an end to the duality that originated in the 1990s.
Díaz-Canel explained in a televised speech that after completing the “corresponding analyzes” and studying “the necessary legal norms”, there are already “conditions that allow announcing the start of the ordering task as of January 1st.”
Then, only the Cuban peso will be preserved, to which an exchange rate of 24 dollars per unit will be applied. This currency has been during these last decades the usual one in the payrolls of most of the Cuban population, while the CUC has been reserved basically for foreign trade and tourism.
Díaz-Canel recalled that, with this change, a policy long anticipated by the Government on the island will come into force, to the extent that the last party congresses had already made it clear that there should be a “redesign of the monetary and exchange system , tax, prices, wages and other income of citizens “.
The president has warned that the reform will not be a “magic solution” to all Cuba’s problems, but he does hope that the disappearance of the CUC will have “a transversal impact on the entire economy”, within the framework of an “update” that it is based on “guaranteeing all Cubans greater equal opportunities, rights and social justice.” This equality, he has warned, “will be possible not through egalitarianism, but by promoting interest and motivation for work.”
Among the collateral effects of this unification – “the task is not without risks,” according to Díaz-Canel – is an increase in inflation. The president has stressed that the Government will not allow “abusive and speculative prices”, warning those who apply them that they will suffer “severe sanctions.”
In July, the island’s authorities already abolished the 10 percent tax on purchases in dollars, in force since 2004, as a result of the lack of tourism derived from the closure of borders due to the coronavirus pandemic. Since then, you can also pay in some stores with a card in dollars.