ES / EN
- February 4, 2023 -
No Result
View All Result
OnCubaNews Needs You
OnCubaNews
  • World
  • Cuba
  • Cuba-USA
  • Opinion
    • Columns
    • Infographic
  • Culture
    • Billboard
  • Sports
  • Styles / Trends
  • Media
  • Special
  • Cuban Flavors
  • World
  • Cuba
  • Cuba-USA
  • Opinion
    • Columns
    • Infographic
  • Culture
    • Billboard
  • Sports
  • Styles / Trends
  • Media
  • Special
  • Cuban Flavors
OnCubaNews
ES / EN
Home Economy and Business

New Exchange Rate: Ten Cuban pesos per CUC?

by Avatar photo Javier Ortiz
December 2, 2013
in Economy and Business, Reports
0

One part of the experiment of removing the dual currency began years ago. As far as many economists suggest, the disappearance of the convertible peso (CUC) first passes through the unification of the two current exchange rates.

This process will occur by the devaluation of the official rate (1CUC for 1CUP), to be increased to meet the rate of exchange houses, CADECAS (1CUC for 25 CUP). The disappearance of the dual currency would require a “unifying rate. “

The first new exchange rate between the Cuban peso and the convertible brother is no secret, in fact was published in a special edition of the Official Gazette of the Republic, in January 2013, ten Cuban pesos per convertible peso. But it is a conversion in one direction; CUC to CUP, not the other way around.

For months, there were rumors that in Cuba there were state-run enterprises working with this special rate, but they did not mention which ones or since when. From Colombia , economist Pavel Vidal , former specialist of Cuba ‘s Central Bank said in a Lay Space magazine interview that Resolution 9 of 2013 the Ministry of Finance established a new special exchange rate for the sale of agricultural products to tourism .

Then, former Economy Minister Jose Luis Rodriguez wrote an article for The Economist of Cuba website, where he mentions a “exchange rate that has reached 10 CUP per CUC.”

In itself, Resolution 9, 2013 does not mention the term “exchange rate “anywhere there is talk of compensation that is added to the official exchange rate (1 × 1) . The compensation comes from the State Budget and applied for the benefit of producers marketing agricultural products (flowers included) to hotels and gastronomic tourism entities.

Related Posts

The pandemic has affected economies and aggravated the already existing crises, as in the case of Cuba, where the cyclical shortage in state stores keeps its inhabitants constantly on the hunt for essential items. Photo: Otmaro Rodríguez

Superheroes in exchange for milk: bartering that alleviate shortages in Cuba using a cell phone

October 18, 2020
Photo courtesy of Havana Club International.

Havana Club 7 years: a Cuban bottle

December 17, 2016

AT&T and ETECSA will connect Cuba and the US for voice, text and data

August 22, 2016

No room. An Island in demand

June 3, 2015

Said resolution implies that there is a fund in Cuban pesos, established within the State Budget and allocated to the Ministry of Tourism, to perform this conversion, which compensates the disadvantages of the one by one exchange rate. Some of the bills are managed by the FINTUR SA Financial House, which operates as an intermediary in those payments.

Compensation existed since November 2011 when the legal framework that allowed wholesale of cooperatives and farmers to the tourism sector was established. In January 2013, their number increased from 7 to 9 pesos, to encourage producers, says the resolution that introduced the change.

The vice president of the Council of Ministers and Minister of Economy, Marino Murillo, once said that the sale of products to hotels by peasants represented a problem for the subject of the different operating currencies in agriculture and tourism, but he didn’t mention what the real problem was … which is quite complex.

Convert ten pesos into CUC is not a simple operation. It takes its dose of mathematics. According to Resolution 9, the tourist ” facilities receive invoices in Cuban pesos (CUP), divide the amount of these between the result of the sum of the compensation specified for each convertible peso, plus the rate of change adopted by the Banco Central de Cuba, that figure recorded in its accounting records and the payment order they issue in convertible pesos “(… ) .

In simple terms: if a hotel is billed 1,000 Cuban pesos for their purchase, they should divide 1,000 between one and nine, and then issue a payment order for 100 pesos convertibles.

If there wasn’t such compensation, hotels and other tourist facilities should pay a CUC for each Cuban peso that the products cost. In that case, for example, if the farmer sold a melon at 20 Cuban pesos, a hotel should pay 20 CUC. With compensation, the farmer receives his 20 pesos and the hotel just spent 2 CUC.

10 × 1 has become a standard reference post dual currency scenario. Economist Vilma Hidalgo, an authority on the subject of the dual currency, used the exchange rate ten to one as a hypothetical example of how the economy would work if there weren’t two exchange rates.

This is only an exchange rate established for relations of sale between agriculture and tourism , but to our knowledge , it has not been expanded to the rest of the economy, although the former economy minister , José Luis Rodríguez said in November 2013 that ” business entities covered by ongoing experiment are working with rates of 10 CUP for CUC. “

Is ten to one the unifying rate? Or is it a temporary experiment, like the seven to one, only in force for two years from 2011? For now, the answer is pending.

Author

Avatar photo Javier Ortiz
Previous Post

The source of life or a sample of blue Servando

Next Post

Cuba against HIV

Javier Ortiz

Javier Ortiz

Periodista de la Televisión Cubana, vecino del Vedado habanero y guitarrista por cuenta propia (y sin licencia). Escribe para sitios en Internet desde los 14 y se hizo Licenciado en Periodismo diez años después. Se pasa el día tecleando sobre música, política y economía.

Next Post

Cuba against HIV

Havana : the number of collapses caused by heavy rains rises to 135

Eliades Ochoa finishes 2013 with a string of concert

Leave a Reply Cancel reply

The conversation here is moderated according to OnCuba News discussion guidelines. Please read the Comment Policy before joining the discussion.

Your email address will not be published. Required fields are marked *

Most Read

  • The Enchanted Shrimp of the Cuban Dance

    1538 shares
    Share 615 Tweet 385
  • Western Union sets up new offices to send remittances to Cuba

    21 shares
    Share 8 Tweet 5
  • What foods can be brought to Cuba and what imports are forbidden?

    392 shares
    Share 157 Tweet 98
  • Yanis Varoufakis in Cuba: the left must recover the concept of freedom

    11 shares
    Share 4 Tweet 3
  • How the U.S. Can Support Cuba’s Emerging Private Sector

    10 shares
    Share 4 Tweet 3

Most Commented

    • About us
    • Work with OnCuba
    • Terms of use
    • Privacy Policy
    • Moderation policy for comments
    • Contact us
    • Advertisement offers

    OnCuba and the OnCuba logo are registered® trademarks of Fuego Enterprises, Inc., its subsidiaries or divisions.
    OnCuba © by Fuego Enterprises, Inc. All Rights Reserved.

    No Result
    View All Result
    • World
    • Cuba
    • Cuba-USA
    • Opinion
      • Columns
      • Infographic
    • Culture
      • Billboard
    • Sports
    • Styles / Trends
    • Media
    • Special
    • Cuban Flavors

    OnCuba and the OnCuba logo are registered® trademarks of Fuego Enterprises, Inc., its subsidiaries or divisions.
    OnCuba © by Fuego Enterprises, Inc. All Rights Reserved.

    Go to mobile version