How 2 currencies affects Cuban business owners

2-currency system created in 1994 to deal with weak economy

HAVANA – The issue of two currencies continues to be a topic of conversation not just in Havana but throughout Cuba.

Cuba has a two-currency system that dates back to 1994. It was said to have been created as a way to deal with a weak economy.

There is the Cuban peso and then there is the Cuban convertible peso, known as the CUC.

The value of the CUC is pegged to the dollar, 1 for 1.

Tourists typically use the CUC, and Cubans use them to buy consumer goods.

If you visit Cuba, here's a way to understand it:

Walk into the exchange house with $100 and you will walk out with 87 CUCs, because the Cuban government charges a tax on dollars.

So in practice, the U.S. dollar is worth 87 CUCs.

If you change that for national money, you will get 2,088 pesos.

For every CUC, you get 24 Cuban pesos.

An outdoor market in the Havana municipality, Playa, is a cooperative, meaning the locale is state-owned, but the individual stands are private.

The small-business owners at the stands mainly use Cuban pesos in their transactions.

Yuniel Soto said they take both currencies at the neighborhood market, but national money -- the peso -- is what they mostly use.

He adds that any money made in CUCs has to be switched over to pesos before sellers settle their daily accounts with the government.

For a Cuban woman selling eggs, having two currencies is not a big deal because she said when you convert it, it's all the same: cash in their pocket.

As for the future of the currency, Soto thinks it’d be easier to do business in one currency.

The Cuban woman, however, said the government should figure it out. She added that she's not into politics -- an answer typically given when Cubans are hesitant to speak to the media on camera.

Some analysts say the double currency system is likely not going away anytime soon, especially in 2017, because this year is expected to be a tough economic year for Cubans.


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