CUBAN CONVERTIBLE PESO

The 'Cuban convertible peso' (ISO 4217 code: 'CUC' — sometimes given as 'CUC$') (informally called a 'chavito'), is one of two official currencies in Cuba, the other being the Cuban peso. It has been in limited use since the early 1990s when it was treated as equivalent to the U.S. dollar. On November 8, 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 only exchangeable within the country, its value is currently pegged to $1.08 USD.[1] Coins in circulation are one-, five-, ten-, 25-, and 50-centavo coins and one- and five-peso coins — the one-centavo piece was introduced in 2000, and the five-peso coin is very rare. Banknotes in circulation are one-, three-, five-, ten-, 20-, 50-, and 100-convertible peso bills. The convertible peso is, by the pegged rate, the 13th highest valued currency unit in the world, the highest valued "peso" unit and the second highest valued currency unit in the Americas.

Contents

History

Historical exchange rates

See also

External links

History

From 1993 until 2004, the Cuban currency was split between the Cuban peso (used mainly by Cuban citizens for staples and non-luxury items) and the U.S. dollar in combination with the convertible peso, which was used for tourism and for luxury items.
On November 8, 2004, the Cuban government withdrew the U.S. dollar from circulation citing the need to retaliate against further U.S. sanctions. 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 much needed hard currency.

Historical exchange rates

From its introduction until 2005, the convertible peso was pegged to the U.S. dollar at 1:1. On March 24, 2005, the central bank increased the value of the convertible peso by 8% making one convertible peso worth 1.08 U.S. dollars.
A 10% tax is applied when exchanging cash, in addition to this 8% increase, and a commission, meaning that one convertible peso will cost more than US$1.20. The 10% tax is not applied to other currencies, nor does it apply to bank transfers or credit card payments.
For transactions using credit cards, the cards are charged in U.S. dollars at an exchange rate of 1.1124. This combines the 1.08 rate with an extra 3% "service charge".

See also

★ Cuban peso

★ Central banks and currencies of the Caribbean

★ Economy of Cuba

External links

★ Pictures of Cuban Convertible Pesos