The Cuban government announced this Monday the implementation of an experiment in its retail commercial network in convertible pesos (CUC), which brings up new questions about the future of this currency in the Cuban economy.
The test consists of giving, “experimentally” for the time being, the change in Cuban pesos (CUP) and not in CUC in two stores located in Havana: the Centro Comercial Almendares and the 5ta y 42, both in Playa municipality and belonging to the Tiendas Panamericanas chain of stores.
Although the text of the press release of the Central Bank of Cuba, published in the official newspaper Granma, does not specify it, the title does notify that the operation will be carried out “exclusively in CUP.” According to the release, the decision responds to the population’s “criteria” and is part of “the monetary organization measures that are being implemented in the country.”
The press release, which does not specify the starting date of the test, states that “based on the results achieved, and its effectiveness during the development of the experiment, its progressive extension to other commercial establishments in Havana and the rest of the provinces will be assessed, and the population will continue to be notified in a timely manner.”
The convertible peso (CUC) is one of the two currencies in force on the island, together with the CUP. Officially it is equivalent to the dollar―although this foreign currency is subject to a tax on the island―and its official exchange rate is 25 CUP in the case of its purchase from and 24 when sold to the government.
This monetary duality, which began on the island in the wake of the severe economic crisis of the 1990s and the decriminalization of the dollar, has become a sword of Damocles for the afflicted Cuban economy. Since 2014 –date in which it was allowed to pay in CUP in the stores selling in CUC–, the authorities announced the start of the efforts for the eradication of that duality, which has not yet been implemented amidst the tensions the country has been experiencing.
However, several economists have warned of signs that reunification could be close, which is now joined by the announced experiment. Rumors are also circulating about a possible government measure in this direction in early 2020.
Previously, the ban on importing CUC had been announced since November 16―the export had already been banned since 2012―, which also meant the elimination of the use of this currency inside the airports (at the border).
In addition, the announcement occurs in the context of the new economic measures taken by the island’s government, which are recovering the use of the USD and other international currencies―through magnetic cards associated with bank accounts―for the purchase and import of certain products in Cuba, after which the value of the CUC has been devalued against the dollar, despite the fact that the official exchange rate has remained unchanged.