Decoding Cuba’s currency reforms
Updated:
Updated:
January 11, 2021 22:39 IST
Cuba will gain from a unified peso but it must take citizens along in order to implement the new reforms
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Cuba will gain from a unified peso but it must take citizens along in order to implement the new reforms
The devaluation of the Cuban peso (CUP) and the withdrawal of the convertible peso (CUC), the second currency of the country, neither of which can be traded internationally, caps Cuba’s gradual economic transition since the end of the Soviet Union.
The reforms that came into force on January 1 aim to eliminate price distortions arising from multiple exchange rates and reduce Cuba’s dependence on imports of basic commodities. These conditions have been exacerbated by the fallout from the COVID-19 pandemic, decline in the export of the nation’s famed medical services, the depletion of foreign exchange revenues from tourism, and the crippling impact of U.S. economic sa