‘Experiment’ may mark another step towards dual currency unification

Cuba has formally announced that it has begun an experiment with its convertible currency which could see it gradually begin to unify the pricing of goods, enabling it to address the economic anomalies caused by its dual currency system.

Cuban state media have reported that two stores in Havana have begun to give change only in Cuban pesos (CUP) instead of a dollar equivalent in convertible pesos (CUC). At the same time, in a short note, the Central Bank said that the measure, which it termed as an ‘experiment’ – an expression used when a de facto process is not yet state policy but is being closely monitored – said that the actions could be extended to other provincial retail locations in the future.

“Depending on the results and effectiveness of the experiment, its gradual extension to other commercial establishments in Havana and the rest of the provinces will be evaluated,” the Central Bank said.

Cuba has two currencies in circulation, the CUP and the CUC which is valued at 1CUC to 24CUP. Cubans however are mainly paid in CUP despite many non-essential goods only being available in retail outlets in CUC.

In other recent related moves also suggesting that the country is moving towards unifying its two currencies, a larger peso note has begun circulating, other convertible currencies have been deemed no longer legal tender for purchases, retail stores have begun to sell non-essential and ‘luxury’ items, such as appliances, for Dollars though electronic bank cards liked to convertible currency bank accounts, the import and export of convertible pesos has been banned, and stress has been laid on ordinary Cubans saving more.

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