Cuban peso
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The peso (ISO 4217 code: CUP, sometimes also dubbed "national peso") is one of two official currencies in use in Cuba, the other being the convertible peso. Cuban currency has no official value outside the country. The peso (CUP) is used by tourists only for staple and non-luxury products. However, the local citizens are paid their wages in pesos and have to pay all everyday expenses in CUP.
The convertible peso is currently pegged at $1.08 USD and is used for luxury products and services. As of March 2006, one convertible peso equals approximately 26.5 pesos. As of April 2nd, 2006 one dollar equals 24 pesos in the Cuban National Bank (Banco Central de Cuba), which is the most important bank on the island.
History
The first issue of the Cuban peso was a series of banknotes in 1857. The currency continued to be issued only in paper form until 1915, when the first coins were issued. In 1959, when the revolution triumphed, one peso equaled one USD. It lost value due to the U.S. blockade and the suspension of the sugar quota. This suspension was the principal economical force driving Cuba to seek out a new economic partner, the Soviet Union. When the Soviet Union dissolved in 1991, the peso lost much of its value and the exchange rate fell to 125 pesos to the USD. Recently, it has become more valuable, fluctuating between 23 and 25 pesos to the dollar.Circulating Currency
Coins in circulation are 1, 2, 5, 20 and 40 centavos and 1 and 3 pesos. Banknotes in circulation are 1, 3, 5, 10, 20, 50 and 100 pesos.Note: 40 centavo coins were withdrawn from circulation around July 2004 and are no longer accepted as payment.
Two parallel currencies
In 1993, due to the collapse of the Soviet Union, the US dollar was made legal tender to encourage hard currency to enter the economy. The dollar became the currency used to purchase some non-essential goods and services, such as cosmetics, and even non-staple kinds of food and drink. In 1994, the convertible peso was introduced at a par with the dollar.Cuban state workers receive a portion of their wages in convertible pesos, the rest in the normal pesos. Shops selling basics, like fruit and vegetables, generally only accept the normal peso, while "dollar shops" sell the rest. Confusingly, dollars are sometimes referred to colloquially as "pesos", with which currency is meant being understood from the context.
On November 8, 2004, the Cuban government withdrew the U.S. dollar from circulation, citing the need to retaliate against further U.S. sanctions.
See also
External links
- [Cuba Currency Guide] - One country, two currencies.
- [Cuban Bank Notes]
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