Originally published on Tue October 22, 2013 4:09 pm
Cuba will end the two-currency system it has used for nearly 20 years. Since the collapse of the Soviet Union, Cuba has used either American currency or a peso that's pegged to the dollar alongside its national peso.
The monetary unification will phase out a system that has become a symbol of exclusivity and foreign wealth. Many products that are imported into the country can be bought only with the dollar-based convertible peso. But most Cubans are paid in the standard peso, which is worth just a fraction of the other currency.
"The policy exacerbated the creation of a two-tier class system in Cuba which divided privileged Cubans with access to the lucrative tourist and foreign-trade sectors from those working in the local economy," the BBC reports, "all-too-visibly contradicting Cuba's supposedly egalitarian society."
Cuba's Central Bank says it will continue to back both the convertible peso, or CUC, and the Cuban peso, or CUP, when it begins the process of unifying the two currencies. The bank says the change will make it easier to calculate labor costs and other statistics, along with making Cuba's economic system more efficient.
No dates have been released for the plan, which has the backing of President Raul Castro. The change was announced in an official guideline published in the Communist state's Granma newspaper.