Since Wednesday I have been hearing this and rumours are flying from all over Cuba. According to my friends in Santiago, it has caused some panic buying/selling in CADECA but nothing definite.
Some are hanging to the words of the new presidente and his “promise of change” and veiled criticism to the two tier currency system
Let’s keep an eye on this, I don’t think Cuba is ready for this in the short term
This variation of the Radio Bemba news is right up there with 1,000,001 Miami rumors of Fidel’s death : for the last 45 years! (Gusanos will pretend they never said it or wrote it, but that’s typical of their disinformation campaigns. Every one a Perez Hilton in his or her own mind!)
According to the BBC News 2/28/08:
“We are examining the progressive, gradual and prudent revaluation” of the Cuban peso, Raul Castro said.
According to the The Economist 2/28/08:
“In his speech, Raúl also gave broad hints of economic changes. He recalled a commitment by Fidel in 2005 gradually to revalue the peso. Since many prices are set in hard currency, that is essential if wages are to rise above their average of $20 a month.”
According to the Washington Post 2/26/08
Faced with what amounted to a small-scale run on its banks, the government aired a report early Tuesday on the morning news program Buenos Dias emphasizing that any changes to the money system would be gradual.
According to the China Post 2/27/08
While no major political changes appear to be planned, Raul Castro said his top priority was improving standards of living with measures such as greater food production and a revaluation of the Cuban peso that would make goods cheaper for average people.
Some sources near the Cuban representation in the UK have dismissed this as rumour for the near future. However, everyone seems to be expecting some changes in the monetary policy in the long term (ie gradual revaluation of the peso in Q3 2008)
i know from Cuban friends the rumor has been going around for over a year that some major currency reforms are being worked and and will probably lead to a single currency. But these are at the rumor stage - nothing definite and no timeline.
The major problem with a single curency is of course how to keep prices different for tourists and locals.
Remember when East Germany was dying and we were all buying our East Marks in west Berlin at 15 to 20 : 1 instead of at the border at rate of 1:1 and buying everything that wasnt tied down because of the buying power - wasn’t a pretty sight.
I heard from friends near Santiago de Cuba 2 weeks ago, that the convertible peso (which is now 24 MN pesos) will change to be worth 12 MN pesos, SOON. I too am looking for answers and I have some interests in Cuba.
No! On the contrary…. When the people only need to use 1/2 the amount of MN Pesos, then they can buy twice as much stuff when shopping in the places that only take Convertible. It’s twice as good for them.
“Cadeca” is the name of money exchanging locations in Cuba. It is a State owned KIOSK or Building with Windows that people sit behind, similar to other North American money exchange locations that you may find in an airport. People in Cuba and Tourists (me included) visit these locations to cash Cuban Convertible (CUC) pesos for MN Pesos. This can also be done at a bank, however these locations are widespread and more convenient.
John , even in a centrally controlled economy, the law of supply and demand eventually prevails. Ultimately, they will wind up paying twice as much for the same products. It is like swimming in jello. In the long run, they truly will be no better off then they were before. Sad but true