Cuban convertible peso

Cuban convertible peso
peso cubano convertible  (Spanish)
ISO 4217 code CUC
Central bank Central Bank of Cuba
 Website www.bc.gob.cu
User(s)  Cuba
Inflation 5%
 Source The World Factbook, 2006 est.
Pegged with convertible peso = 1.00 U.S. dollars
Subunit
 1/100 centavo convertible
Symbol $, CUC or CUC$
 centavo convertible ¢ or c
Nickname cuc or chavito
Coins
 Freq. used 5¢, 10¢, 25¢, 50¢, $1
 Rarely used $5
Banknotes $1, $3, $5, $10, $20, $50, $100

The convertible peso (sometimes given as CUC$) (informally called a cuc' or "chavito"'), is one of two official currencies in Cuba, the other being the peso. It has been in limited use since 1994, when it was treated as equivalent to the U.S. dollar: its value was officially US$1.00. On 8 November 2004, the U.S. dollar ceased to be accepted in Cuban retail outlets leaving the convertible peso as the only currency in circulation in many Cuban businesses. Officially exchangeable only within the country, its value was increased to US$1.08 on 5 April 2008, and reverted to US$1.00 on 15 March 2011.[1] The convertible peso is, by the pegged rate, the twelfth-highest-valued currency unit in the world and the highest valued "peso" unit.

On 22 October 2013 it was announced that the currency is to be scrapped by gradually unifying it with the lower-value Cuban peso.[2]

History

From 1993 until 2004, the Cuban currency was split between the Cuban peso (the currency Cuban citizens are paid in and used for staples and non-luxury items) and the U.S. dollar in combination with the convertible peso, which was a foreign exchange certificate (in use since at least 1985[3]) used for tourism and for luxury items. The Cuban peso (CUP) can be exchanged to the convertible peso (CUC) at the exchange offices (CADECA), at a fixed rate of 24 CUP to 1 CUC (sell) and 25 CUP to 1 CUC (buy);[1] however, for state household book-keeping purposes, both pesos are valued at a 1:1 rate.[1]

On 8 November 2004 the Cuban government withdrew the U.S. dollar from circulation, citing the need to retaliate against further U.S. sanctions.[4] After a grace period ending on November 14, 2004, a 10% surcharge began to be imposed when converting U.S. dollars into convertible pesos. The change was announced some weeks beforehand and was extended by the aforementioned grace period (it has been claimed this was because the amounts of US dollars being exchanged were more than anticipated). This measure helped the Cuban government collect hard currency.

Coins

In 1994 coins were introduced in denominations of 5, 10, 25 and 50 centavos, and 1 peso. 5 pesos (rarely seen) was introduced in 1999, followed by 1 centavo coins in 2000.

Banknotes

In 1994 the Banco Central de Cuba introduced notes in denominations of 1, 3, 5, 10, 20, 50 and 100 pesos. On December 18 2006 the Banco Central de Cuba introduced a new series of notes themed to "Socialist History and Achievements". The front of the notes are similar to its previous series except that on the back of the notes, instead of depicting the Cuban coat of arms on all denominations, each of the notes now has an individualized design.[5]

2006 Series "Socialist History and Achievements"[6]
Image Value Dimensions Main Color Description Date of issue Date of first issue Watermark
Obverse Reverse
[7] $1 150 x 70 mm Dark green, tan, and yellow Monument to José Martí in Havana Death of José Martí in combat atop a horse at the Battle of Dos Rios 2006 December 18, 2006 José Martí and electrotype 1
[8] $3 150 x 70 mm Red, pink, and light green Monument to Ernesto 'Che' Guevara in Santa Clara Battle of Santa Clara: tank, derailed train, and soldiers with grenade, machine gun, and rifle 2006 December 18, 2006 José Martí and electrotype 3
[9] $5 150 x 70 mm Green, orange and yellow Monument to Antonio Maceo in Havana Protesta de Baraguá: Cuban general Antonio Maceo Grajales and Spanish captain general Arsenio Martínez de Campos y Antón in hammocks 2006 December 18, 2006 José Martí and electrotype 5
[10] $10 150 x 70 mm Brown, blue and green Monument to Máximo Gómez in Havana Revolution Energetica (Energy Revolution): electric power plant, pick-up truck, and linesman 2006 December 18, 2006 José Martí and electrotype 10
[11] $20 150 x 70 mm Dark blue, light blue, and yellow/green Monument to Camilo Cienfuegos Operacion Milagro (Operation Miracle): eye doctors performing surgery and passengers deplaning a jet 2006 December 18, 2006 José Martí and electrotype 20
[12] $50 150 x 70 mm Purple, orange, and yellow Monument to Calixto García e Iñiguez in Havana Marchers carrying flags and banners that read “Trincheras de Ideas Valen Mas Que Trinchera De Piedra” and “La Batalla de Ideas” 2006 December 18, 2006 José Martí and electrotype 50
[13] $100 150 x 70 mm Red, orange, and bright yellow Monument to Carlos Manuel de Céspedes Bolivarian Alternative for the Americas (ALBA): satellite dish, map, woman and man reading, oil refinery 2006 December 18, 2006 José Martí and electrotype 100

The CUC and the U.S. dollar

Between April 2005 and March 2011, the convertible peso was worth 1.08 USD. The CUC is currently pegged to the U.S. dollar at 1:1, as it was between 1994 and 2005.[1]

When exchanging U.S. dollar banknotes a 10% tax is applied plus an exchange commission.[1] The 10% tax is not applied to other currencies,[14] bank transfers, or credit card payments.

For transactions using credit cards, the cards are charged in U.S. dollars plus an extra 3% service charge. (Credit cards issued by U.S. banks cannot be used in Cuba.)

See also

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 "Política Monetaria". Bc.gov.cu. Retrieved 2011-09-30.
  2. ↑ "Cuba to scrap two-currency system in latest reform". BBC News. October 22, 2013. Retrieved October 22, 2013.
  3. ↑ "CUBA - Foreign Exchange Certificates". Banknote.ws. Retrieved November 10, 2013.
  4. ↑ "Cuba's currency: Adios to the greenback". The Economist. 2004-10-28. Retrieved 2011-09-30.
  5. ↑ Cuba issues new convertible peso series dated 2006 BanknoteNews.com. Retrieved 2012-06-12.
  6. ↑ http://banknotenews.com/files/51c54dde80d344a06224566e13849903-155.php
  7. ↑ http://banknote.ws/COLLECTION/countries/AME/CUB/CUBFX0046.htm
  8. ↑ http://banknote.ws/COLLECTION/countries/AME/CUB/CUBFX0047.htm
  9. ↑ http://banknote.ws/COLLECTION/countries/AME/CUB/CUBFX0048.htm
  10. ↑ http://banknote.ws/COLLECTION/countries/AME/CUB/CUBFX0049.htm
  11. ↑ http://banknote.ws/COLLECTION/countries/AME/CUB/CUBFX0050.htm
  12. ↑ http://banknote.ws/COLLECTION/countries/AME/CUB/CUBFX0051.htm
  13. ↑ http://banknote.ws/COLLECTION/countries/AME/CUB/CUBFX0052.htm
  14. ↑ "Centro de Promoción del Comercio Exterior y la Inversión Extranjera de Cuba - CEPEC". Cepec.cu. Retrieved 2011-09-30.