Cuba to end dual currency

The official Cuban Communist Party newspaper Granma said Tuesday the Council of Ministers had decided to gradually implement measures that will lead towards "monetary and exchange rate unification."

Cuba has used a dual currency system since 1994, when the country opened up to mass tourism. Under the current arrangement, the government exchanges money received through tourism, trade and overseas remittance one-to-one with convertible Cuban pesos. However, Cuba pays workers' salaries and charges for services in ordinary pesos, which are worth 25 times less than the convertible peso.

Monetary elite

The state subsidizes many basic services in the communist island nation, but things like internet access in public places and imported goods are available only in convertible pesos.

Such a system allows Cubans with access to the convertible pesos – usually tourism industry workers, small entrepreneurs and people who receive remittances from relatives abroad – the opportunity to obtain certain goods and services that remain unaffordable for many other people.

"[Monetary unification] is not a measure that will by itself solve all of the economy's current problems, but its application is crucial to guarantee the revaluation of the Cuban pesos," Granma said. "It will start with a period of preparations of the conditions that will lead to drafting legal proposals."

President Raul Castro, who has slowly been rolling back certain facets of Cuba's soviet-style economy, had previously mentioned plans to end the double currency system as early as July.

Granma said it was not immediately clear how long the change would take, but said it would help to boost economic efficiency and serve as stimulus to enterprises that import goods and services.

dr/ipj (AFP, dpa, Reuters)