Cuba will soon devalue the exchange rate of the domestic peso against the US dollar. It will do so for the first time since the 1959 revolution. Reuters reported, citing three informed sources.
The reforms are to be introduced by the end of the year. As part of the reforms, the authorities will also unify the two domestic Cuban currencies, two Cuban sources and one foreign businessman said. All three are familiar with the plan.
The official currency peso will be maintained and the so-called convertible peso, whose exchange rate is set for state-owned enterprises in relation to the dollar one to one, but for the public is changed to 24 pesos in case of purchase and 25 pesos in case of sale, will be abolished according to sources. The Cuban government will recognize the current peso exchange rate for the public for a period of time to allow residents to exchange their convertible pesos, automatically doing so for bank accounts held in a convertible peso.
The Cuban economy is largely owned and run by the state and the exchange rates are set by the government.
The measures are part of a package of reforms aimed at combating the economic crisis caused by severe US sanctions under President Donald Trump and a deepened coronavirus pandemic and the bureaucratic incompetence of the island’s economy. The shortage of basic goods has worsened this year, and long queues are common in many stores across the country.
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