What Is the Cuban Peso (CUP)?
The period of time Cuban peso (CUP) refers to the official national foreign exchange of Cuba. Often referred to as moneda nacional, the Cuban peso is represented by the use of the symbols $ and $MN and by the use of the code CUP on the foreign exchange echange exchange market. Issued and maintained by the use of the Central Monetary establishment of Cuba, CUP was once as soon as one in all two currencies used on the island nation until 2021, the second one being the Cuban convertible peso (CUC). Banknotes are to be had in denominations that fluctuate from $1 to $100. Money are minted in values from one centavos to $3.
Key Takeaways
- The Cuban peso is the official national foreign exchange of Cuba.
- Its symbol is $ or $MN and is represented on the foreign exchange exchange market as CUP.
- Banknotes are to be had in denominations that fluctuate in price from $1 to $1,000 while money are minted in price from one centavo to $3.
- The foreign exchange is issued and maintained by the use of the country’s central monetary establishment, Banco Central de Cuba.
- CUP was once as soon as one in all two currencies used with the Cuban convertible peso until 2021 underneath Cuba’s dual foreign exchange device.
Working out the Cuban Peso
As well-known above, CUP is the official national foreign exchange of Cuba. It was once as soon as used along side the convertible peso in a dual foreign exchange device for business inside the local monetary gadget, along side the price of employee salaries by the use of employers. The convertible peso was once as soon as necessarily meant for international transactions and foreign currency purposes until the government made up our minds to discontinue its use in 2021.
The Cuban peso was once as soon as first presented in 1857 when it modified the Spanish exact. The dept into centavos began in 1869. One peso is made up of 100 centavos. Banknotes are printed in $1, $3, $5, $10, $20, $50, $100, $200, $500, and $1,000 denominations. CUP money are minted in values of one, two, 5, 20, and 40 centavos. There are also $1 and $3 money which can also be minted and circulated.
Banco Central de Cuba or the Cuban Central Monetary establishment is the government authority that issues the national foreign exchange. Established in 1997, the monetary establishment may be in command of monitoring the country’s monetary gadget and implementing monetary protection. It moreover leads Cuba’s national banking device by way of 9 commercial banks and a series of various institutions.
The foreign exchange was once as soon as pegged to the U.S. dollar in 1881 on the other hand switched to being attached to rubles in 1960. After the fall of the Soviet Union, the Cuban peso began to float freely against other currencies previous to the introduction of the Cuban convertible peso (CUC).
You’ll now not use debit or credit cards issued by the use of U.S. banks in Cuba.
Explicit Problems
Cubans have been prohibited from the usage of the U.S. dollar for quite some time. Then again the greenback grow to be part of the country’s foreign exchange transfer alongside the CUP when the country adopted the dual foreign exchange device, after the fall of the Soviet Union. The country was once as soon as harassed to open up to tourism because of the industrial crisis that ensued at the time. Most Cuban firms began accepting the greenback.
Then again the country withdrew the U.S. dollar in retaliation for continued American sanctions. America has had a business embargo against Cuba that has been in place since 1961 and remains in affect up to now. Efforts to re-establish members of the family between the two countries began in 2014 on the other hand have stalled all over again.
History of the Cuban Peso
Cuba was once as soon as a Spanish colony for numerous centuries. As such, the existing foreign exchange used inside the country during that time was once as soon as the Spanish exact. Once Cuba received independence from Spanish rule in 1898, it grow to be a republic in 1902.
The Cuban peso found out its place inside the island nation a few years earlier, even though. It modified the Spanish exact as the country’s official foreign exchange in 1857. At the time of the switch, 8 pesos have been price one exact.
The country’s monetary gadget is centrally planned. As such, it is managed and run by the use of the central government. The vast majority of Cubans artwork for the government, with unemployment reaching 2.8% in 2021. Gross house product (GDP) in step with capita amounted to about $9,478 in 2020. Persisted monetary instability—specifically inside the wake of the global COVID-19 pandemic, U.S. sanctions, and an off-the-cuff foreign exchange market—has led the CUP to plummet inside the foreign exchange echange market.
Cuban Peso (CUP) vs. Cuban Convertible Peso (CUC)
Cuba established a dual foreign exchange device when it began circulating the Cuban convertible peso in 1994. This foreign exchange was once as soon as abbreviated as CUC and was once as soon as moreover represented with the symbols $ and $MN. Denominations in CUC have been the identical as in CUP for each and every banknotes and money.
While the peso was once as soon as used for local business—in particular, to shop for staples and non-luxury pieces—the CUC was once as soon as used for sumptuous pieces and tourism, which is why it was once as soon as known as the tourism dollar. The convertible peso was once as soon as tied to the U.S. dollar and was once as soon as typically traded and used by Americans in Cuba. It was once as soon as pegged at par with the greenback.
The council of ministers in Cuba approved a plan in 2013 to unify the two currencies. Plans have been officially offered in 2020 to begin out the process in 2021. The process got stretched out into 2021 because of the global COVID-19 pandemic. As of July 1, 2021, convertible pesos have been now not licensed by the use of retailers and other commercial buyers.
