Sunday, April 29, 2007

Economics minister: Cuba hopes to return to single currency

International Herald Tribune

The Associated Press
Published: April 28, 2007

HAVANA: The economics minister said Saturday that Cuba hopes to return to a single currency, a departure from the current two-currency system that makes many consumer goods unattainable for most Cubans.

Communist Cuba's dual economy emerged more than 15 years ago after the country lost most of its preferential trade and aid with the collapse of the Soviet Union.

"We have been advancing toward monetary unification," Economics Minister Jose Luis Rodriguez told reporters during a briefing on the Cuban economy. "That's the path." He did not provide specifics.

Today, the regular Cuban peso is what Cubans use for virtually all government services — including utilities, transportation, and a monthly food ration — and it is the only currency accepted at popular farmers markets.

But the convertible Cuban peso, which is tied to foreign currencies, is the only money accepted for electronics, packaged food, and other consumer goods at most government-run stores. Cuban government workers, who earn on average about US$15 (€11) a month, cannot afford most of the items available in convertible Cuban pesos at the foreign-currency stores, which are high priced even by American or European standards.
Today in Business

Those who shop at the stores are mostly foreigners or the estimated 57 percent of Cubans who receive cash remittances from family living outside the country.

Until 2 1/2 years ago, the U.S. dollar also circulated one-to-one alongside the convertible Cuban peso.

The Central Bank later "revalued" the convertible peso so it trades at one to US$1.08 (€.79). That exchange does not take into account a surcharge of about 10 percent to change U.S. dollars for the convertible pesos.

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