Cuban Convertible Peso

Overview

The Cuban Convertible Peso (CUC) is one of two currencies used in Cuba. The other currency is simply called the Cuban Peso and has been in limited use since 1994. Retail stores and other businesses mainly use the Cuban Convertible Peso. The Convertible Peso can only be exchanged in Cuba itself. It is pegged to the US Dollar at par. The Convertible Peso is rated as the strongest Peso currency, as well as the 10th highest currency worldwide.

Economy

• Cuba’s economy is run by the state and seen as a planned economy.
• The majority of the labor force works for the government. The unemployment rate is 1.7%.
• Services account for 74% of the total GDP.
• Top industries are tobacco, petroleum, steel, cement, pharmaceuticals, construction, nickel, agricultural machines, and sugar.
• Export products are tobacco, shellfish, coffee, citrus, and medical products.
• Import products are chemicals, equipment and machinery, food, and petroleum.
• Cuba recently started attracting world-class pharmaceutical and biotechnology industries.
• 80% of Cuba’s food is imported.
• Tourism is growing rapidly, however the retail sector in Cuba is poorly run.
• The Netherlands is the largest importer of Cuban products.

History

• In 1994, the Cuban Convertible Peso was introduced alongside the existing Cuban Peso.
• Until 2004, Cuba used the Peso (CUP) for non-luxury items and staples; the Convertible Peso and the US Dollar were used mainly in the tourism trade and for luxury items.
• In 2004, the USD was take off the market due to sanctions. A 10% tax was charged for converting USDs to convertible pesos. This tax does not apply to any other currency.
• In 2011, Cuba pegged the Convertible Peso to the USD at par.