Cuban convertible peso

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

The convertible peso (sometimes given as CUC$ and informally called a cuc or a chavito) is one of two official currencies in Cuba, the other being the Cuban peso. It has been in limited use since 1994, when its value was pegged 1:1 to the United States dollar.

On 8 November 2004, the U.S. dollar ceased to be accepted in Cuban retail outlets and left 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 in April 2005 but 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, with it being gradually unified with the lower-value Cuban peso.[2]

History

From 1993 to 2004, the Cuban currency was split between the Cuban peso (the currency in which Cuban citizens are paid and which is 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 exchange offices (CADECA) at a fixed rate of 24 CUP to 1 CUC (sell) and 25 CUP to 1 CUC (buy);[1] but for state household bookkeeping 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 sanctions from the Helms-Burton Act.[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 grace period (it has been claimed that it was because the amounts of U.S. dollars being exchanged were more than anticipated). The 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. The 5 pesos (rarely seen) was introduced in 1999, followed by the 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 18 December 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, but 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 Revolución 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

CUC and U.S. dollar

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

When U.S. banknotes are exchanged, a 10% tax is applied, plus an exchange commission.[1] The 10% tax is not applied to other currencies[14] so American visitors may do better by first changing their money into euros or other hard currencies before they convert them to pesos.

See also

References

  1. 1 2 3 4 5 "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.

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