GLOBALink | Cuba starts monetary overhaul amid COVID-19 pandemic

HAVANA, Jan. 22 (Xinhua) -- It's been three weeks since the Cuban government put into effect a monetary overhaul in hopes of improving the country's economic performance amid the pandemic and the tightening of U.S. sanctions against the island.

The reform eliminates the dual currency system in place on the island since 1994, which had been operating with the Cuban peso (CUP) and the Convertible peso (CUC).

With the new measures in place, one U.S. dollar will equal 24 CUP, and the CUC will be out of circulation by the end of June.

"We reiterate the significance and importance of this task, which will put the country in better conditions to carry out transformations required for the updating of our economic and social model," said Cuba President, Miguel Diaz-Canel, in a statement.

At present, ATMs are no longer dispensing CUC notes as grocery stores, shopping centers and state-operated businesses are giving changes only in CUP.

In addition, Cuba's Central Bank updates the daily exchange rates of CUP with foreign currencies.

Havana resident, Aramys Rojas, told Xinhua that the government is moving on the right track. "I believe the government is adopting positive measures, thinking of the future," he said.

Senior professor of University of Havana, Fabio Fernandez said, "The monetary overhaul is part of an economic policy Cuba is implementing nowadays, seeking to achieve a more coherent performance of the country's economy."

As part of the comprehensive reform, the Caribbean nation also increased national average salaries, pensions and social security payments fivefold, which will improve the purchasing power of millions of people nationwide.

Currently, private sector workers and state enterprises are not allowed to increase prices more than threefold, and those found in violation will face high fines.

All these changes are in keeping with guidelines issued by the Communist Party of Cuba in the context of the country's economic and social updating. Cuban government and people are working together on the implementation of the monetary overhaul for economic prosperity and the defense of social achievements reached by the Cuban Revolution for more than six decades.

Produced by Xinhua Global Service