Cubans give muted welcome to end of 'convertible peso' dual currency system

By Lynn

Cubans give muted welcome to end of 'convertible peso' dual currency system

Cuba used to have dual currency system: domestic pesos (CUP) and "convertible" tourist pesos (CUC) which is 25 times more valuable and tied to the U.S. dollar. Tourist Pesos are used for forighn trade. The dual currency system existed since 1994, after the collapse of the Soviet Union ended profitable trade deals. And it forced Cuba to open its economy to tourism.
Many imported goods can only be bought in CUCs, and it divided society into ordinary Cubans and those who access to the much more valuable currency.

However, Cuba plans to phase out this system as part of reforms for the island's economy.
Many Cubans welcomes this change, because they beleive that it might improve their economies.
Workers are paid in domestic pesos, and it made profssionals like doctors and teachers to work at night as taxi drivers or private tutors to supplement their state salaries.

However, any changes bring the risk of high inflation. Juan Molina, 45, a gas station attendant said that he likes the idea that ordinary national currency will be used everywhere and that he doesn't have to change it into CUC to buy things. He also said that he supports the change, but he is worried that the prices might rise while wages remain as low as they are.

I heard that Cuba's centralized government has dominated all commerce on island and its economy is hampered hampered inefficiencies and a longlasting U.S. trade embargo. I hope this change will bring some positive effect to the economy of Cuba.


source: http://worldnews.nbcnews.com/_news/2013/10/22/21079591-cubans-give-muted-welcome-to-end-of-convertible-peso-dual-currency-system?lite