Friday, August 31, 2012

The Beginning of the End of Cuba’s Dual Currency? (I)

The Beginning of the End of Cuba's Dual Currency? (I)
August 31, 2012
Dmitri Prieto

HAVANA TIMES — A few days ago I was surprised by a sign posted in a
chopin (a hard-currency store) in my neighborhood. It was located right
next to the register (as well as next to the store entrance, as I
realized later).

It's a truism that two currencies circulate in Cuba.

Perhaps the most pathetic corollary of this fact is that the dual
currency — more than representing inequality with regard to the access
to foreign currency (generated from remittances, tourism, the mixed
sector, work contracts and travel abroad) — conceals rampant income

While it's possible to purchase convertible pesos with national currency
pesos, the true complication is being able to get enough money (either
in convertible pesos or "national" pesos) to meet one's personal or
family needs (whether basic or not).

The poster in question announced that people holding RED system magnetic
debit cards could use these in that chopin to pay for purchases in local
currency, of course at the officially established exchange rate.

The RED system operates for three Cuban banks (Banco Popular de Ahorro,
Credito y Comercio, and Banco Metropolitano), which issue debit cards
for accounts into which the wages of Cuban workers in some sectors are
deposited (with these salaries being paid in local currency, of course).

There still aren't many ATMs in Cuba, and very few stores have terminals
where you can use those debit cards in local currency* (actually, I
don't recall having seen any).

So I was surprised by that poster in the store. In addition to expanding
the use of these cards, it threatens to break one of our "psychological
barriers," one that is even more rooted in the Cuban system today.

This barrier is the tacit acknowledgment that there exists the
possibility of buying goods in a chopin with the "money from one's
wages" (of course, only if you have a RED card).
* Magnetic cards are not always viewed as "conveniences," because the
vast majority of products and services are paid for in cash, and these
debit card holders often have to wait in long lines to withdraw their money.

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