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Cuba Implements New Foreign Currency Exchange Rates to Strengthen Peso

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Image: Public Domain Pictures

Alejandro Gil, First Deputy Prime Minister and Minister of Economy and Planning and the Minister-President, Marta Wilson, of the Central Bank of Cuba announced on Mesa Redonda the implementation of new foreign currency exchange rates. The rate will be “economically based and will work with all currencies, including U.S. dollars.”

The move had been identified as one of the 75 measures for economic recovery approved by Parliament in July.

Gil said that as of August 4, the country will resume purchasing foreign currency from individuals, including the U.S. dollar. The new exchange rate of 120 pesos to the dollar is an increase from the previous rate of 24 pesos to the dollar. 

The new official exchange rate for the population and the non-state sector will be 120 Cuban pesos per US dollar (120 CUP x 1 USD). It will not affect the business sector, Gil said. 

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The main goal of the move is to have the economy operate in one currency, the peso, using an exchange rate to guarantee monetary stability and improve purchasing power. 

The goal in establishing a single exchange rate, Gil said, makes it necessary to advance with caution to avoid mistakes. 

Two of challenges of economic recovery are the needs to increase foreign exchange earnings in the face of a situation of a high levels of imports, always subject to international price increases. 

Gil said the measure is an important step on the way to implementing the new exchange market, as part of the steps needed to allocate foreign currency to finance the state and non-state sectors.   

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Foreign currency can be purchased at the new exchange rate in establishments such as airports, hotels, exchange houses, and banks. 

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