|Here's how it works. Walk up to your Cuban hotel money changing desk and slap $100 US on the counter and in return you will receive a big smile and 87 Convertible Pesos (CUCs). That's a hefty 13% for El Presidente.|
Tuesday, June 2, 2015
CUBA SEGMENT 4 / TWO FACES OF THE CUBAN PESO.
Editor’s note: On a daily basis from June 1 thru June 30, 2015 Pillar to Post online magazine is featuring articles, photos and insights resulting from a recent group tour, an adventure we dubbed: the April 23 Brigade’s Tour of Cuba 2015. This week we will dwell on the essentials: mojitos and money, plus cigars and cars. We’ll focus on the big handshake and what’s up with the embargo.
CUBA’S CONVENIENT TOURIST TAX
The Republic of Cuba has two national currencies. The Cuban Peso, which goes 24 to one US dollar is used by Cubans for domestic purchases. The Cuban Peso is the currency Cuban citizens are paid in and used for staples and non-luxury items. Cuban using ration books may use Cuban Pesos in the government stores.
The second currency is called the Cuban Convertible Peso. It is commonly called a CUC (pronounced ‘kook’). In November 2004, the U.S. dollar ceased to be accepted in Cuban retail outlets leaving the convertible peso (CUC) as the only currency in circulation in many Cuban businesses.
As of April, 2015 dollars are not accepted and many Cubans with dollars approach tourists to exchange their dollars for CUCs.
The only place in the world where one can use the CUC is in Cuba. Rumors say the CUC will eventually be merged into the Cuban Peso if Cuba genuinely wishes to be a player in world trade.
The CUC is the currency tourists must use when exchanging for Cuban money. For example, a tourist going to the official money changing counter in major hotels will receive 87 CUCs for $100 US dollars. Basically, the 13% exchange cost is a tourist tax and a way for Cubans to pay for luxury items. A Cuban family pays for a TV set in CUCs and not the cheaper Cuban Peso that they are paid in.
The dollar/CUC invention was Cuba’s way to obtain hard currency (dollars) during dire economic times when the island’s trade partners demanded dollars in payment for goods.
In 2006, the Banco Central de Cuba introduced a new series of notes themed to "Socialist History and Achievements".