Implementation of New Monetary System Begins in Cuba

As of January 1st, the population will have a term of 180 days to change in banks and exchange houses their convertible pesos (CUC) for Cuban pesos, according to the current rate of 1x24. | Photo: @CanalCaribeCuba

1 January 2021

On this first day of 2021, the implementation of the process of monetary and exchange rate unification begins in Cuba, which constitutes an unavoidable necessity and an indispensable step to move forward with the country's economic strategy.

The so-called Restructuring Task, promoted by the government, implies unifying the current exchange rates, the cessation of the circulation of the convertible peso, and a general reform of salaries and prices, with the gradual elimination of excessive subsidies and undue gratuities.

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These procedures find legal backing in the Official Gazette of the Republic of Cuba in its extraordinary edition number 68 of 2020, which includes the procedures related to the plan in the country and features eight decree-laws, three decrees and an equal number of agreements.

Marino Murillo, member of the Political Bureau of the Cuban Communist Party and head of the Commission for the Implementation of the Guidelines, explained that this is an interdisciplinary and transversal process for the Cuban economy.

It seeks, he said, to solve macroeconomic imbalances, reduce budget deficits, favor productive incentives and improve efficiency and competitiveness at international level.

¡Llegó el día cero! ¿Y ahora qué? (+ Infografías) https://t.co/rbnCNpsJLC #Cuba

— Cubadebate (@cubadebatecu) January 1, 2021

As Cuban President Miguel Díaz-Canel said, monetary and exchange rate unification is not the magic solution to economic and financial problems, "but it should lead us to increased labor productivity and a more efficient performance of the productive forces."

He reiterated the importance and significance of this step, "which will put the country in a better position to carry out the transformations demanded by the updating of our economic and social model on the basis of guaranteeing all Cubans greater equality of opportunities, rights and social justice."

Analysts agree that this is one of the most complex tasks that the country faces in the socio-economic realm, heightened by the effects of the economic, commercial and financial blockade imposed by the United States, the impact of COVID-19 and the international economic crisis.

Since last October, the population has received ample information on the subject through the press, and the actors involved have been trained to carry out this process, defined by the government authorities as an essential step to advance the nation's economic strategy.