Thursday 25 February 2021

The dollar is a coveted commodity in Cuba; ‘If you don’t have you’re screwed’

The need to acquire basic necessities, which can only be bought with dollars, has accelerated the revaluation of the currency

QCOSTARICA – (Havana) “If you don’t have dollars, you’re screwed,” Cubans repeat over and over again, a month after the entry into force of a profound financial reform in their country.

A transaction of Cuba convertible pesos (CUC) for US dollars in the middle of the street in Havana, in December 2019. AFP

This U.S. Dollar is more coveted than ever and is traded on the black market at twice the official rate.

- Advertisement -

Until the end of 2020, Cuba maintained a complex two-currency system. That changed on January 1 of this year.

One of them is the CUC (Cuban convertible peso), which for a long time had a one-to-one parity with the dollar and which will disappear within five months.

The CUC has coexisted for 26 years with the Cuban national currency (CUP) valued at 24 units per dollar.

A month after Cuban authorities launched a strong adjustment known as “monetary reordering,” which officially reaffirmed the price of the dollar at 24 Cuban pesos, the US currency soared on the black market.

- Advertisement -

The CUC (Cuban convertible peso), which for a long time had a one-to-one parity with the dollar and which will disappear within five months.

On portals such as Revolico, a busy classifieds website in Cuba, the informal dollar is priced at 50 pesos.

“I don’t think there are many countries in the world that have that level of overvaluation of their currencies,” says economist Pedro Monreal on Twitter.

In the midst of this painful adjustment, Monreal warns that “the informal rate continues to devalue, and pressure could be created for a new official devaluation”, in reference to the one-for-one exchange rate that benefited state-owned companies (85 % of the economy).

Dollarization

Faced with serious liquidity problems due to the intensification of the United States embargo during the past administration of Donald Trump, the Cuban government undertook a partial dollarization of the economy at the end of 2019 in order to attract foreign currency.

On U.S. Dollars accepted here. The signe in this business in Havana was warned -in September 2020- that the CUC is not welcome. AFP

- Advertisement -

Since then, Cubans have been able to purchase in dollar markets a wide range of products that are scarce in the rest of the country’s stores. In these establishments, you can only pay with a bank card in dollars, which have funds deposited by family or friends from abroad.

The need for Cubans to go to these markets to access products, often essential, has accelerated the demand for US currency.

The dollar became scarce even before tourism, which represents the largest inflow of foreign currency to the country, declined due to the pandemic.

- Advertisement -

FACT CHECK:
We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

Legislative Assembly officially inaugurated new building amid protests and disorder

QCOSTARICA - Costa Rica's Legislative Assembly officially inaugurated its new building...

CNE: 19 cantons maintain a high risk of contagion

QCOSTARICA - In total, 19 cantons in six provinces maintain a...

MOST READ

‘Bye’ to the weekend license plate restrictions

QCOSTARICA - The nighttime vehicle restrictions starting on March 1 will be from 11:00 pm and not 10:00 pm as this month, and on...

How Chile became an unlikely winner in the COVID-19 vaccine race

At first glance, it may seem that the race to acquire COVID-19 vaccines has been won by western nations. But alongside the UK, Canada,...

New cold push will bring gusts of up to 100 km/h and cooler temperatures this weekend

QCOSTARICA - A cold push is expected to grip all of Costa Rica this weekend, with wind gusts of up 100 km/h and cooler...

Pandemic setback: Tourist visits to Costa Rica fell to 1998 levels

QCOSTARICA - If there were doubts about the impact of COVID-19 on the Costa Rican tourism sector, the figures will help to clear them...

The Costa Rica saliva test to detect COVID-19 would also help in cases of malaria, zika and dengue

QCOSTARICA - On Friday, February 5, 2021, the Universidad de Costa Rica (UCR) held a virtual symposium in which mathematicians, biologists, communicators, doctors and...

Costa Rica signs an agreement to become a full member of CAF

(BNamericas) - In order to strengthen the well-being of the population and the sustainable development of the country, Costa Rica has been incorporated a...

The “marías” resist dying in a technological shakeup for taxi drivers

QCOSTARICA - The disappearance of the taximeters (popularly known as "marías") will not be immediate despite the new mobile application that will manage services...

Drop in covid-19 cases is not only occurring in Costa Rica

QCOSTARICA - In recent weeks, Costa Rica has experienced a reduction both in the number of reported new cases of covid-19 and in its...

The Tregynon man who survived the worst earthquake in Costa Rican history

On May 4, 1910, the most destructive earthquake in the history of Costa Rica destroyed the city of Cartago. Such had been the devastation...

WANT TO STAY UP TO DATE WITH THE LATEST!

Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.