14ymedio, Madrid, 3 June 2022 — The umpteenth extension to change Cuban Convertible Pesos (CUCs) that are still in the hands of Cubans begins this Friday. The authorities have established a new term of 90 days to get rid of the currency, although the incentives are few, since the exchange rate of 24 pesos per CUC is maintained. In any case, there is no alternative for money that, otherwise, is dead paper or a collector’s item.
The amount of convertible currency that may remain on the Island is unknown, since the latest and scarce data available go back to May of last year, when Marino Murillo, then in charge of the Planning Task, stated that more than 80% had been collected. What he never said is the actual amount represented by the percentages he provided in the time that the process lasted, which, initially, should have been completed expeditiously, at least during 2021. However, the extensions have been constant, both for the cash and for accounts.
The Cuban economist Elías Amor wonders in a post on his blog this Friday what reason could push Cubans to hoard a currency that is worth nothing. “Undoubtedly, there is something dark that they do not want to recognize. Civil disobedience? Cubans district in their leaders?” he speculates.
As the expert, who lives in Spain, notes, inflation has devalued the already useless CUC. Although the currency — which was born in the 1990s and became the symbol of inequality on the island after creating two social classes based on its possession — had been dying for at least five years before its final death, there were still Cubans who maintained safe savings in CUC at the beginning of 2021.
If they had exchanged them at that time, with the same rate of 1×24, the purchasing power would have been much higher than today, when inflation has sunk the Cuban currency even further.
“The inflation that has occurred in the Cuban economy from that date until today, 98% in the inter-annual rate, reduces those 24,000 pesos in terms of purchasing power to only half, that is, about 12,000 pesos. What in January 2021 it could be bought with 24.00 pesos, now it is virtually impossible,” Elías Amor calculates based on a deposit of 1,000 CUC.
Following the same logic, the economist addresses accounts in dollars, the currency that Cubans really long for. Those 24,000 pesos that could have been obtained at the beginning of 2021 with 1,000 CUC, exchanged at the price that the US currency had at that time in the informal market, about 70 pesos, would have become 350 dollars; while now, even taking into account the devaluation of the last weeks, barely 240 dollars would be obtained.
The economist accuses the Central Bank of Cuba of ineffectiveness in the current situation, with the aggravating circumstance that its role is merely decorative because it depends entirely on the Party and the Government, a situation that leves monetary policy entirely in the hands of the political authorities.
Elías Amor asks Cubans that, in the face of the total abandonment of the institutions, they take charge of their savings and take an interest in listening to the experts to do what suits them best. “Cubans should know that today’s money is not worth the same as yesterday’s, but the important thing is that it will not be worth the same as tomorrow’s.”
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