The
convertible peso (sometimes given as
CUC$) (informally called a
chavito), is one of two official currencies in
CubaThe Republic of Cuba is an island country in the Caribbean. It consists of the island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city. Cuba is home to over 11 million people and is...
, the other being the
pesoThe peso is one of two official currencies in use in Cuba, the other being the convertible peso . It is subdivided into 100 centavos....
. It has been in limited use since 1994, when it was treated as equivalent to the U.S. dollar. On November 8, 2004, the U.S. dollar ceased to be accepted in Cuban retail outlets leaving the convertible peso as the only currency in circulation in many Cuban businesses.
The
convertible peso (sometimes given as
CUC$) (informally called a
chavito), is one of two official currencies in
CubaThe Republic of Cuba is an island country in the Caribbean. It consists of the island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city. Cuba is home to over 11 million people and is...
, the other being the
pesoThe peso is one of two official currencies in use in Cuba, the other being the convertible peso . It is subdivided into 100 centavos....
. It has been in limited use since 1994, when it was treated as equivalent to the U.S. dollar. On November 8, 2004, the U.S. dollar ceased to be accepted in Cuban retail outlets leaving the convertible peso as the only currency in circulation in many Cuban businesses. Officially only exchangeable within the country, its value is currently pegged to $1.08 U.S.
http://www.granma.cubaweb.cu/2005/03/25/nacional/articulo08.html The convertible peso is, by the pegged rate, the tenth
highest valued currency unitThe highest valued currency unit is the currency in which a single unit buys the highest number of any given other currency or the largest amount of a given good...
in the world and the highest valued "
pesoThe word peso was the name of a coin that originated in Spain and became of immense importance internationally. Peso is now the name of the monetary unit of several former Spanish colonies...
" unit.
History
From 1993 until 2004, the Cuban currency was split between the
Cuban pesoThe peso is one of two official currencies in use in Cuba, the other being the convertible peso . It is subdivided into 100 centavos....
(the currency Cuban citizens are paid in and used for staples and non-luxury items) and the U.S. dollar in combination with the convertible peso, which was used for
tourismTourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people who "travel to and stay in places outside their usual environment for more than twenty-four hours and not more than one consecutive year for leisure, business and other...
and for luxury items.
On November 8, 2004, the Cuban government withdrew the U.S. dollar from circulation citing the need to retaliate against further U.S.
sanctionsThe Cuban Liberty and Democratic Solidarity Act of 1996 is a United States federal law which strengthens and continues the United States embargo against Cuba...
. After a grace period ending on November 14, 2004, a 10% surcharge began to be imposed when converting U.S. dollars into convertible pesos. The change was announced some weeks beforehand and was extended by the aforementioned grace period (it has been claimed this was because the amounts of US dollars being exchanged were more than anticipated). This measure helped the Cuban government collect
hard currencyHard currency or strong currency, in economics, refers to a globally traded currency that can serve as a reliable and stable store of value...
.
Coins
In 1994, coins were introduced in denominations of 5, 10, 25 and 50 centavos, and 1 peso. 5 pesos (rarely seen) were introduced in 1999, followed by 1 centavo coins in 2000.
Banknotes
In 1994, the Banco Central de Cuba introduced notes in denominations of 1, 3, 5, 10, 20, 50 and 100 pesos.
Historical exchange rates
From its introduction until 2005, the convertible peso was pegged to the U.S. dollar at 1:1. On March 24, 2005, the central bank increased the value of the convertible peso by 8% making one convertible peso worth 1.08 USD.
A 10% tax is applied when exchanging cash, in addition to this 8% increase, and a commission, meaning that one convertible peso will cost more than US$1.20. The 10% tax is not applied to other currencies, nor does it apply to bank transfers or credit card payments.
For transactions using credit cards, the cards are charged in U.S. dollars at an exchange rate of 1.1124. This combines the 1.08 rate with an extra 3% service charge.
See also
- Cuban peso
The peso is one of two official currencies in use in Cuba, the other being the convertible peso . It is subdivided into 100 centavos....
- Central banks and currencies of the Caribbean
This is a list of the central banks and currencies of the Caribbean.The Eastern Caribbean Central Bank serves 8 countries and territories:-See also:*Central banks and currencies of Africa...
- Economy of Cuba
The economy of Cuba is a largely state-controlled, centrally planned economy overseen by the Cuban government, though there remains significant foreign investment and enterprise in Cuba. Most of the means of production are owned and run by the government and most of the labor force is employed by...