What is the difference between convertible peso and peso

Until then, Cubans are left to do what they have successfully done for decades — adapt to tough economic conditions and innovate where they can. New round of sanctions also prohibits Americans from staying at properties owned by the Cuban government. Protesters met Cuban deputy minister Saturday after large public protests decrying curbs to civil liberties. Report commissioned by US Department of State is latest bid to find cause of mysterious illness among diplomats.

By Kaelyn Forde. Published On 1 Jan So what does that mean for Cubans and visitors to the island? Mainly due to the drop in tourism, there are fewer dollars to clear the informal exchange market. Therefore, a second essential point regarding the exchange rate adjustment is that the monetary reform has not succeeded in producing a convergence of all exchange rates in the economy.

An interesting lesson from the s is that this spread narrowed after reforms were applied, both structurally and to reduce the fiscal deficit. The black market exchange rate of 50CUP:1USD reflects the shortage of goods and dollars, an excess of national currency in circulation, and expectations about the evolution of the economy and reforms.

The future of the parallel exchange rate will depend on how these factors evolve. It seems unlikely that the Central Bank will decide in the short term to reduce this exchange gap with the black market by applying a second devaluation of the exchange rate. Such a move would further accelerate inflation and foment confusion and mistrust. The Central Bank will surely prefer to allow some time for the state enterprises and enterprises funded with foreign capital, the various markets, and the population to process and adapt to the new monetary order.

A third factor is that in terms of the economy's nominal average exchange rate, the devaluation represents almost twice the devaluation of the early s. As there is more than one exchange rate, it is preferable to take an average among them considering their relative importance to better approximate the scope of the devaluation.

In the last column in Table 1, the average exchange rate is estimated using the share that each exchange rate has within GDP. We can see that in the s the economy was subject to a nominal devaluation of 5. In terms of the real exchange rate discounting domestic inflation , in the s the inflation rate exceeded the nominal devaluation and, consequently, the real exchange rate appreciated instead of depreciating.

While the average nominal exchange rate depreciated 5. In , in contrast, we can anticipate a real depreciation of the exchange rate; that is, inflation will not cancel out the effect of the exchange rate because the average nominal exchange rate depreciated Therefore, more favorable real effects on the economy can be anticipated as a result of the exchange rate adjustment in than those derived from the exchange rate adjustment in the s.

The fact that there is an incomplete exchange rate pass-through to inflation has enabled exporters to benefit and competitiveness to increase in a part of the tradable sector; there are also signs pointing to improved efficiency. A fourth element to consider is that thus far the exchange rate devaluation has been insufficient to restore the convertibility of the Cuban peso.

In the current deteriorating macroeconomic environment, and with very few dollars entering the balance of payments, for now neither enterprises nor individuals will be able to freely exchange Cuban pesos in dollars or other foreign currencies at banks and exchange bureaus.

As the monetary reform begins, the national currencies and official exchange rates have been unified, but the dual economic scheme is maintained, so that enterprises and citizens with access to foreign currency maintain a disproportionate advantage over those who are not connected to these flows.

The expansion of dollarization can only be stopped by restoring the convertibility of the Cuban peso. This will depend, to a large extent, on the pace of economic recovery and exports and on overcoming the balance of payments crisis. The fifth factor has to do with understanding that the current exchange rate adjustment is revealing financial losses that had been accumulating for several years, but that were not visible under the scheme of two national currencies and fixed exchange rates.

You can often use non-American debit cards to exchange money. You can exchange for CUP , but many airports won't allow it for foreigners. But a few CUP can make a nice souvenir or addition to presents for friends if you find yourself with a lot of CUP left at the end of your trip.

What kind of traveler are you? People want different things when they travel. Find a Local. They provided these tips but can help with more specific questions : As an American , you need to bring enough money to last for your entire trip, so a good budget is essential. Paying for lodging via Airbnb is helpful, as it lessens the amount of cash you need to carry.

A few CUP go a long way. Plus, you can only use it in some places and CUC is accepted everywhere. Credit Cards, Debit Cards, And Traveler's Checks Locals tell us that the biggest mistake travelers make has to do with credit cards, debit cards, and traveler's checks.

So, read these tips carefully: For credit cards: No credit card associated with an American bank can be used while in Cuba. The one exception: Mastercard credit cards issued by Stonegate Bank in Florida. Cards from Stonegate Bank can be used if you have expressed your intent to travel to Cuba and signed their compliance form. Then, those cards may be used at stores, hotels, and restaurants, but not at ATMs.

If you plan to get around this rule by bringing a credit card issued by a European bank, keep in mind that some European banks have American parent holding companies so these cards won't work in Cuba either.

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