As of November 8, 2004 the US dollar, the common
currency of exchange for tourists in Cuba, is no longer legal
tender. Cubans will be continue to be allowed to hold dollars,
but transactions in shops, restaurants, .... will have to be in
"peso convertible".
This will leave Cuba with two currencies, two
"peso" circulating: the "peso nacional" that is the currency in
which Cuban citizens are paid and in which they do most of their
purchases (except for those goods that are only available in the
"divisas" shops) and the "peso convertible" (also referred to as
"chavito").
On April 9, 2005 the
peso convertible has in turn been revaluated with 8% versus all
currencies. The currency was revaluated again by 3% in May 2006.
This is reflected in the exchange rates listed on this page.
This "peso convertible" will replace the dollar as
currency in the so called "dollar shops" or "tiendas in divisa".
Restaurants, taxis, hotels, ... which previously denominated
their prices in dollars and will therefore be the "tourist"
currency. These prices are now converted "one to one" to peso
convertible. Any payments you make with credit cards will also
be peso convertible for which you will be charged your local
currency equivalent of 1 U$ when you receive your credit card
bill. As such not much changes.
What does change is that a 10% "tax" is imposed on
any transaction exchanging dollars to peso convertible. This
means that the "exchange value" of the US dollar is effectively
reduced to 90 cent of a peso convertible both for Cubans and
tourists.
Let me focus on the effect that this will have for
the casa owners: if they continue to accept dollars without
raising prices they will effectively lose 10% as they will have
to pay their taxes and purchases in peso convertible. This
creates a difficult dilemma for them: in which currency to
charge their guests and which prices to announce on their sites?
I have been in contact with a series of them and the consensus
solution seems is that all prices will be stated in peso
convertible and can be paid in any easily exchangeable foreign
currency the conversion calculated on the basis of the exchange
rates that are valid at the time. In practice the most wanted
currencies will be the Euro and the Canadian dollar. Given the
exchange value of the dollar (90 centavo peso convertible),
people wanting to pay dollars will find that the dollar cost of
a room has gone up by 10%.
As such people from Europe will be better off
taking Euros with them to Cuba. Canadians are best to take their
national dollar though Cubans prefer Euros. These can then be
used in Cuba as direct payment (take sufficient small
denomination notes and coins in that case as for a while people
will have little change) or can be exchanged for peso
convertible. All others are best to convert their currency to
any of the two above in their home country or exchange their
national currency for peso convertible in Cuba. Note that only a
limited range of currencies is easily exchangeable in Cuba
except is a very few specialist exchange houses in Havana and
the tourist resorts.
