The hard currency, according to a Caribbea360 report, is used by tourists and other foreigners, and to which only a minority of Cubans have access.
The eight percent devaluation of the Cuban Convertible Peso (CCU), was announced by President of the Central Bank of Cuba Ernesto Medina Villaveirán in a statement this week.
The CCU is one of two official currencies in Cuba, the other being the standard peso used by most Cubans. The convertible has been in limited use since 1994, when it was treated as equivalent to the US dollar. Officially exchangeable only within the country, it was previously valued at US$1.08.
“The very dynamics of our economy in subsequent years, aggravated by the damage and losses provoked by the hurricanes of 2008, as well as the effects of the international economic crisis, characterized by much volatility on the monetary markets, obliged us to reconsider the convenience of maintaining a convertible peso exchange rate in relation to the US dollar and other currencies which is not in line with the country’s economic needs in present conditions,” the Central Bank President said.
“This decision signifies a discreet step directed at fostering an improvement in the country’s hard currency balance, given that it would constitute a stimulus to export activity and to the process of replacing imports. This, linked to more effective planning, procedures used for the allocation of hard currencies, greater rationality in managing the issuing of monies, and increased productivity and efficiency in the national economy, will help to establish more favourable conditions in our external financial relations.”
A 10 percent tax imposed on people buying convertible pesos with US dollars in cash will remain in place.
Medina’s statement said this would be “compensation for…the irrational and unjust economic, financial and commercial blockade imposed on Cuba by the United States government for more than 50 years”.
The changes will not affect the standard peso which trades at roughly 25 to the US dollar.
(Parts of this article were written with submissions from a Caribbean360 release)