Cuban Government Asks for Calm in Face of Rumors About Imminent Monetary Unification

A woman in Havana showing Cuban convertible pesos and Cuban pesos. (Cubanet)

14ymedio biggerEFE via 14ymedio, Havana, 30 March 2018 — Cuba’s Central Bank, on Thursday, tried to calm the “false” rumors that one of the two currencies circulating in the country will be immediately withdrawn in the process of monetary reunification, which has led to a rush on banks and currency exchanges.

“This event is based on the false information that in the next few days the Cuban convertible peso (CUC) will be removed from circulation as part of the monetary unification process,” said a statement from the Central Bank, read tonight on the government channel’s primetime evening news.

Monetary unification is one of the primary pending reforms in Cuba, where two currencies currently circulate: the Cuban peso (CUP), in which state salaries are paid, and the Cuban convertible peso (CUC), the hard currency, with its value tied one-to-one with the US dollar and equivalent to 24 CUP, according to official exchange rates.

The persistent rumors about the imminent unification of the two currencies, reflecting the Cuban government’s plan to eliminate the CUC which it began working on in 2013, has caused hundreds of Cubans to go to banks and currency exchanges in recent weeks to get rid of Cuban convertible pesos and exchange them for Cuban pesos (also known as “national money”), dollars or euros.

The official statement insists that “the CUC will continue in circulation until such time as its withdrawal is decided on as a part of the monetary unification process, an event that will be officially announced.”

“The date for the beginning of the process of monetary unification has not been set,” stresses the agency, which also insists on the permanence of the current rate of exchange.

Finally, the Central Bank noted that during the 7th Congress of the Communist Party of  Cuba there was “once again, the decision to guarantee deposits in bank accounts in foreign currencies, CUC and CUP, as well as the cash held by the population.”

Last December, during his most recent speech before the National Assembly, President Raúl Castro urged that the unification process be completed and described the elimination of the double currency as “the most important process” that needed to happen to advance his reforms.

“No one can calculate the high cost that the persistence of duality has meant for the state sector, which favors the unfair inverted pyramid: where there is greater responsibility, there is lower remuneration,” Castro said in his remarks.

He also warned that the situation promotes the migration of skilled workers to the non-state sector, which pays higher salaries and pays them in CUC.

Although the CUC is officially quoted at a value of 24 CUP, several official exchange rates coexist in the accounts of State enterprises in Cuba, which, according to some analysts, generates strong distortions that make it impossible to caculate the real state of the Centralized Cuban economy.


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