Cuba to phase out double currency

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Cuba to phase out double currency

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Ever since 1994, Cubans have lived with a double-currency system, but that is to be no more under financial reforms announced by President Raul Castro.

It would put an end to a system which exacerbated differences between the richest and poorest.

Cuba’s convertible peso is pegged to the US dollar while the local peso is worth a lot less, making life complicated for many locals buying imported products, as Havana resident Nancy Garcia explains:

“For example when it comes to an air conditioner, a refrigerator, a television set – the currency is more expensive. It remains high for nationals in the exchange rate.”

The system had largely favoured Cubans working in the lucrative tourism sector.

The phase out could boost local workers’ income and remove a major hurdle to the import and export market but it won’t happen overnight.

The unification of the two currencies could take up to 18 months.