Cuba’s Currencies: CUP and CUC vs. USD

[El Presidente]

 

https://havanatimes.org/diaries/safie-m-gonzalez/cubas-currencies-cup-and-cuc-vs-usd/

Cuba’s Currencies: CUP and CUC vs. USD

 July 27, 2020

By Safie M. Gonzalez

https://havanatimes.org/diaries/safie-m-gonzalez/cubas-currencies-cup-and-cuc-vs-usd/

HAVANA TIMES – If there was something people couldn’t talk about when I was a little girl, it was the dollar. Only foreigners could buy things in this currency. If anyone was caught with green bills in their pocket, they would be sent to jail.

Soon after, in 1993, the dollar was decriminalized, and finally, Cubans with family members living abroad could receive financial aid.

Then, the CUC (Convertible Cuban Peso) came along, which is nothing but another official currency in our country. That was when the three currencies – CUP, CUC and USD – began to circulate. The State opened new stores, where you could only purchase items in CUC and USD.

Soon after, the CUC gradually began to replace the US dollar, and the latter finally stopped circulating.

Up until very recently, just a couple of years, you could only buy things in these markets or stores in CUC, but, today, you can pay with both of the national currencies. This means to say that if you are going to buy a bottle of cooking oil, which costs 1.95 CUC, then you can pay for it in this currency or its equivalent in CUP, which in the case of cooking oil would be 50 CUP.

Everything was going relatively well… well, at least most of the population was able to buy goods in one of these two currencies, but then the pandemic came with its disastrous aftershocks.

It just so happens that the Cuban Government has decided to incorporate the dollar into the economy again, as a “strategy” to recover economically; but, where does the US dollar come from? Who has access to it?

Well, a few months ago, some bank cards were allowed in Cuba which family members living abroad (for those that have one) can transfer foreign currency into them, and then Cubans on the island could and can buy electrical appliances from certain stores. That said, during this post-COVID phase, when we clearly need to recover “as a country”, the Government has opened up 72 stores (out of the 4,000 that exist on the island) where payment can only be made in MLC (Freely Convertible Currency, so as not to say dollars).

Many people have expressed their disagreement and there have been protests because, well first of all: No Cuban worker is paid in dollars, and secondly: Not every Cuban has family living abroad who can help them buy basic essentials.

If all stores were well-stocked, I’m sure there wouldn’t be that many complaints and people disagreeing, but this isn’t the case because while stores in CUC and CUP are empty, these new stores are full. Conclusions? Well, that the scales aren’t exactly tipped in the favor of those most in need.

[NSXCIGAR]

I don't think the Cubans understand that if the USD stores didn't exist there wouldn't be any goods on any shelves. The only way the regime can get any products on shelves is to get a real currency in their hands quickly. They don't want their own CUP back and nobody's accepting Cuba's rotten CUC or CUP. 

I also love the idea of a Cuban "economic recovery." When has that ever happened? The economy vacillates between bad and horrible every 5 years. 

I would love to see the kind of economics the University of Havana teaches.

 

[BoliDan]

They're creating a higher domestic value for USD. Smart, since they're pegged ?... Always learn what the currency that the local population values before exchanging. Especially, in Central/South America. 

They should shift supply of goods to CUC/CUP stores, since there is no (little) foreign currency coming into the country. They're stagnant, and waiting on USD isnt going to decrease impoverished conditions. Which is what they should be focused on, rather than macroeconomic stability.

People like Hector and farmers that get a lot of USD can trade for double (or more in these conditions) worth of CUC and CUP. If they want it and hopeful for a return to domestic 1:1 on CUC... 

This shows why fiat currency is so very ,VERY, falible. But after the US exploited the gold standard after Breton woods, is there a trustable system?  

Too deep... Very good time to visit and not exchange for domestic currency.

[JohnnyO]

About 5 years ago a relative was studying marketing in Cuba at the University. She asked me to bring textbooks from the US so she could get an understanding of US markets. Out of curiosity I asked to see her textbooks. She said I only have one. Don't remember the title but it was something about Marxist/Socialist/Lenin economies from 1973. Mudaflip. John

[Nino]

19 hours ago, El Presidente said:

It just so happens that the Cuban Government has decided to incorporate the dollar into the economy again, as a “strategy” to recover economically; but, where does the US dollar come from? Who has access to it?

Good question.

All the people that were jailed for having Dollars back in the 90's, who were spit on for wanting to emigrate and leave the island, all the "self-employed" ...

Imagine having to show your ID card and a card showing you have foreign currency on it just to be allowed into a store - where you are being scammed for items that supposedly were not available a few weeks ago in regular stores and now sell overpriced.

Socialism kept alive by people sending money from capitalism.