Handling Currencies is a crucial skill for any traveler venturing beyond their home borders. As individuals traverse the globe, they encounter various currencies, each with its own value and denominations. Proficiency in handling foreign currencies is not merely a convenience; it is an essential aspect of ensuring a smooth and enjoyable travel experience.
Additionally, understanding the denominations, proper tipping etiquette, and general spending norms in a particular destination minimizes the risk of financial mishaps and ensures that travelers can seamlessly participate in local transactions. Furthermore, being proficient in currency management fosters cultural sensitivity. It demonstrates respect for the local way of life. Safety is another critical aspect of currency handling during international travel.
In the age of technology, digital payments have become increasingly prevalent. However, not all destinations have fully embraced cashless transactions. Many countries have cash-based economies, and relying solely on credit cards may not be feasible in all situations. Travelers may encounter situations where electronic payments are impractical. Proficiency in foreign currency transactions provides a valuable fallback, ensuring that individuals can manage their expenses even in areas where digital payment infrastructure is limited. Cuba, although a great adventure in itself, and worth visiting is one of such places.
Official Currency in Cuba: Short Story
Cuba has had its own currency for many years, dating back to its history as a sovereign nation. The Cuban Peso (CUP) has been the official currency of Cuba for most of its independent history. Cuba gained independence from Spanish rule in 1902, and the Cuban Peso was established as the official currency.
After the Cuban Revolution led by Fidel Castro in 1959, the country went through various economic and political changes. Despite these changes, the Cuban Peso remained the official currency.
However, in the 1990s, after the Soviet Union and the Eastern Socialist Bloque disappeared, and with that the almost 9 billion in subsidies to the Cuban economic bubble, Cuba entered a critical period. At the time, Fidel Castro named the period “Special Period”, euphemism for War Economy in Peace Time.
One of the key measures to help the country readjust the new financial reality was a dual currency system. The dual currency system, with the introduction of the Cuban Convertible Peso (CUC), came in 1994, as a response to economic challenges and the need to attract foreign investment and hard currency. After some years, the CUC exchange rate to the USD Dollar set at 25 x 1. The dual currency system was not a historical norm but rather a more recent development in Cuba’s economic history.
By 2010 a group of study began working in a strategy to unify the currency and give the Cuban Peso the unique and leading role it is meat to have. This strategy was named “Tarea Ordenamiento”, “Economic Overhaul”, and of course it was thought to reform, not only the dual currency system, but to reshape the Cuban Economy.
Unexpectedly in 2021, yes, with the COVID-19 pandemic still raging, the strategy was implemented. It totally backfired, and now instead a dual system, it turned out to be a multiple system, with the USD, Euro, MLC (Digital Currency backed on foreign currency, mostly USD on a Cuban Debit Card, and only valid in Cuba), and to a less extent CAN Dollars.
Arguably the worst mistake in economic policy in the last 65 years, and being Cuba the subject of debate here, is quite a lot to say. Anyway, today the Cuban Economy, in real terms, is partially dollarized (USD). Most prices will be set taking the price of the US dollar as reference. Thus, the Cuban Peso (CUP) the currency in which salaries and pensions are paid has lost relevance and value.
Reality of the Cuban Peso (CUP) at the Moment
After decades of ignoring the financial reality, the Cuban authorities seem to be losing control of the currency exchange market.
Today there are multiple rates: official and unofficial. Officially, the rates are 24 cup x 1 usd for companies in business in Cuba, and 120 cup x 1 usd for everyone else. But reality beats fiction, and these rates are pure fiction. The Cuban National Bank has no way to back up an offer in USD. They just do not have any money, period. So, most of the transactions will happen in the black market at the “unofficial” rate.
what is the price of the USD dollar?
In absence of official information, even in crisis the Cuban officials refuse to acknowledge the reality and share credible information and data, the estimate exchange rate in Cuba is being calculated by an independent party. eltoque.com/tasas-de-cambio-de-moneda-en-cuba-hoy, independent media online has taken the responsibility to develop a methodology calculate an estimated exchange rate for the most common currencies and make it public. This estimated is calculated using data from different platforms. This is not the only source for this information, but it is by far the most widely followed.
Anybody and everybody will be interested in exchanging money, since having dollars or euros is indispensable to buy first need supplies that will only be available in hard currency. Yes, I know. Cuba’s egalitarian system with the rationing card has long stopped helping at all. Anyway, this is a good reference point but it si not solid rock. It fluctuates. So, it is always good to keep your mind open, and save some room for negotiations. It is way in your favor no matter what.
Handling Currencies in Cuba in 2024
This is a question that can be answered with a big “it depends on…”. It depends on the type of traveler you are and the travel you are doing: solo, backpacker, going through the country, staying at resorts, adventure tours like cycling or hiking; etc.
As mentioned above, the best currencies to bring are USD, Euros, Sterling Pounds, or CAN dollars, and cash will always prevail, since banking in Cuba is years behind the world, and I am not exaggerating. Access to exchange offices, banks and ATM can be random and very slow, annoyingly slow. Also, travelers from US or from anywhere else, but with US Bank issued cards will struggle. Only credit or debit card NOT connected to US Banks will work, and even so relying on a card is not wise, since the POS card machine may not work, if they even have it, or simply internet is down or too slow.
For a traveler on tour, a bike tour let’s say, cash is the way to go, and, as mentioned above, rate will be ALWAYS on your favor, and also by exchanging directly with people you are helping these people to have access to a financial resource to get first need products, that they would not have access to unless they had family abroad sending remittances. Most of the expenses or gratuities that they will pay for will be better in cash: tipping, paying at private restaurants, private local vendors, you know, supporting the local economy.
We, Cuba Cycling Adventure, strongly advocate to go private and support the local entrepreneurs, private restaurants, art vendors, staying at casas particulares (cuban version or Air B&B), which is the true way to support the Cuban People.
However, due to the lack of hard currency, the government now is pushing hard, almost forcing Banking, and some services are no longer available in cash. Therefore, if you are traveling across the country solo or backpacking, factor this into your plan. In a more formal setting, tour guides will solve those issues for you very easily.
Conclusion
Even though, it may sound chaotic, and until a certain point it is, the lack of a proper banking system, the economic sanctions and the current inflationary crisis in Cuba is beneficial for the exchange rate and handling currencies. It is ironic, but true. Travelers today get 10 times more money for every dollar or Euro, just to name these two, than what they got 4 years ago.
Bringing USD or Euros in cash is the best way to visit Cuba. You get a great deal out the people you come across with on a daily basis and at the same time you support the local economy and the Cuba People. Today, there are favorable rates mostly in the informal market, 265 CUP x 1 USD and sites like elToque.com monitor and make public the rate fluctuations. Handling currencies in cash helps the local economy and the people who otherwise would not have access to USD or Euros, when these currencies are nowadays vital for first need products acquisition.
