Sometimes, countries officially turn to the US dollar in what’s known as “dollarisation”, or the euro. If people use another currency unofficially, it can create a thriving black market and exert extreme pressure on the national economy. When a country’s domestic currency is unstable, subject to high rates of inflation or generally not trusted to hold its value, people may start to use a second currency they think will fare better - especially when it comes to buying imported goods. The Cuban peso, known as the CUP, was created as the island’s currency by the first president of the country’s post-revolution Central Bank, Ernesto “Che” Guevara.īut thanks to an embargo by the United States and some of the island’s state-run economic policies, the value of Cuba’s currency evolved to become a tricky issue. So what does that mean for Cubans and visitors to the island? Here’s what you need to know. The government has set the exchange rate at 24 Cuban pesos to $1, and the convertible Cuban peso, known as the CUC, will be phased out completely by June, leaving the island with one currency for the first time in more than 20 years. The Cuban government formally ended its dual currency system on Friday, devaluing its peso for the first time since the 1959 revolution that swept the late Fidel Castro to power.
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