Reports from Cuba: Cuban convertible peso can’t keep up with the dollar

Marcelo Hernandez reports in 14yMedio via Translating Cuba:

Cuban Convertible Peso Can’t Keep Up With The Dollar

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The ‘alter ego’ of the Cuban peso is not the Cuban convertible peso, but the dollar.

Cuba’s dual currency system has been in existence for such a long time that many young people never lived under a system with a single national peso. The rumors of possible unification of the two currencies are no longer listened to and people appear resigned to continuing to pay for things in both Cuban convertible pesos (CUC) and Cuban pesos (CUP). The promise to resolve this financial mess appears to be one more item that Raul Castro will leave incomplete at the end of his term next year.

There are at least some certainties, however, in this economic schizophrenia: the alter ego of the Cuban peso is not the Convertible peso, but rather the dollar. The so-called chavito – a slang term for the CUC – that emerged in the decade of the ‘90s, is just a substitute for the “currency of the enemy,” a camouflage to cover over Abraham Lincoln’s face or Benjamin Franklin’s head. Little by little, the bills minted by our neighbor to the north have imposed themselves in the informal market.

The terrain won by the dollar is expressed in many ways. Not only in the classified ads that specify payment is accepted in USD for the products on offer, but also in the existence of an exchange system parallel to that of the official banking system, where the “greenbacks” are quoted at a price ranging from 0.95 to 0.97 CUC. It is also evidenced in nice pictures like the one attached to this article, where the chavito is conspicuous by its absence on the man’s T-shirt. After all, the CUC is nothing more than an imitation of Uncle Sam’s money.