Money in Cuba

This was the situation when I was there in 2004. A complication for the traveller to Cuba was that there were 3 currencies in use. Natives used the peso, but hard currency goods (those that had no price controls) were priced in US dollars. The rate of exchange was about 26 pesos to a dollar.


Practically all spending by tourists was in US dollars: accommodation, transportation, tours, entertainment, souvenirs, etc. In enclave resorts they would be used exclusively. You only get a chance to use pesos in places like produce markets and local buses. And ice cream stands. But you would have to face the paucity of choice and the long queues with many locals. That was why I changed only a few US dollars to pesos, I didn't anticipate using pesos often.


The third currency is the one that confuses; it's called the convertible peso. It's printed by the Cuban government and valued at par with the US dollar and could be used in place of the US dollar. Its purpose was to alleviate the shortage of US dollar bills. However it had no status outside Cuba and whenever I got any I tried to spend it as soon as possible. I hardly saw any though, but some convertible peso coins did pass through my hands.


And because US coins were harder to come by, prices were usually rounded to dollar amounts.


The effect of two currencies was to create a distorted dual economy where occupations that gleaned US dollars were sought after. That is why Cubans who once had good positions turned to renting rooms, and catering to tourists in one way or another. Anything for the almighty buck. The bellboy who got a dollar tip from me in the hotel would have been able to buy a fair bit of produce at the markets to feed his family with. Rather hypocritical kind of "socialism".


To add to the confusion, the Euro was starting to make inroads in resort enclaves due to the tourists from the EU.