[Marxism] Higher Exchange Rate of Cuban Currency

walterlx at earthlink.net walterlx at earthlink.net
Sat Mar 26 07:53:44 MST 2005


Please observe the continuing changes in Cuba's economic
situation, including both the re-valuation upwards of the
regular Cuban peso [aka "Moneda Nacional" or "MN"], as well 
as the further devaluation of the U.S. dollar [aka "USD" 
as they call it in Cuba], AND the latest development, the 
de-linking of the Convertible Cuban pesos ["CUC"]from the 
US dollar. 

These developments, along with steps previously declared
to begin inside the island to improve the standard of
living of the Cuban people, from the distribution of the
rice-cookers, the pressure cookers and the repairs which
are to be made in refrigerators, reflect, in really direct
ways, which EVERY CUBAN WILL SEE IN THEIR OWN HOME, of the
turn in the island's economic situation. 

These are indications of the Cuban leadership's attempts to
cushion the Cuban people from the international crisis we
see the capitalist world experiencing. How many times have
we heard the expression "bowing down before the almighty
dollar"? Well, those who do that are finding that they will
experience the same social and economic traumas which the
United States is increasingly having. Only a revolutionary
govenment which has control over the levers of national
economic power can take the steps indicated in this report.

CubaNews is doing everything we can to being you all of the
reports and on these developments as quickly as possible.

Skilled translators continue to be necessary and their work
will be compensated by our boundless appreciation!


Walter Lippmann, CubaNews
http://www.walterlippmann.com 
===========================================================

Higher Exchange Rate of Cuban Currency 
Stems from Economic Realities

Havana, March 25 (AIN) Economic and financial realities 
determined the announcing of an 8% increase in the exchange 
rate of the Cuban Convertible Peso and the Cuban Peso in 
relation to the US dollar and other foreign currencies starting 
next April 9.  

During Friday evening’s popular radio and TV show “The Round 
Table,” Francisco Soberon, Minister-President of the Central 
Bank of Cuba gave a detailed explanation of the reasons that led 
to the decision, contained in Agreement No. 15 of the bank’s 
Monetary Policy Committee, announced Thursday evening by Cuban 
President Fidel Castro, during a special address at Havana's 
Palacio de las Convenciones.

As informed then, the increase in the exchange rate will not 
affect accounts in foreign currencies already existing in Cuban 
banks, or new ones that might be opened before April 9.

The rise comes to add up to a March 18 Central Bank of Cuba 
decision that devalued the US dollar to 24 Cuban pesos for 
buying operations and 25 pesos for selling, down from 26 and 27 
respectively, for a seven percent revaluation of the Cuban local 
currency. 

Minister Soberon stressed that irresponsible economic and 
financial policies introduced by the US government had led to a 
progressive and sustained depreciation of the US dollar, a 
situation that creates high risks for nations that use the that 
currency as a mean of payment or in their national
reserves.  

In view of the above, Resolutions No. 65 and 80 of the Central 
Bank of Cuba were recently introduced replacing the use of US 
dollars in Cuba by the local convertible peso for payments among 
companies as well as for cash operations.

Since November 8, 2004, the Cuban Convertible Peso has been the 
mandatory means of exchange in the territory of the Republic of 
Cuba for all transactions involving foreign currencies in which 
entities, foreign visitors and Cubans participate, and a ten 
percent tax was introduced for cash payments in US dollars, to 
counter the risks and costs involved in the use of the US dollar 
by the Cuban banking system. 

The US government, through its economic, commercial and 
financial blockade against Cuba, was seeking to introduce 
further restrictions against payments in dollars by the island. 

Jorge Barrera, Deputy President of the Central Bank of Cuba, 
explained that Agreement No. 15 of the bank’s Monetary Policy 
Committee announced Thursday was putting an end to the fixed one-
to-one exchange rate of the Cuban Convertible Peso before the US 
dollar.

According to calculations, as of April 9, one US dollar will be 
exchanged for approximately 80 cents of a Cuban Convertible 
Peso, and one Convertible Peso will buy 1.04 dollars, while one 
US dollar will trade for 20 regular Cuban Pesos. 

Orlando Lopez, President of the Banco Popular de Ahorro, Cuba’s 
savings bank, said there has been citizen support for the new 
measures, as expressed in the fact that there has been an 
increase in the balances of existing bank accounts. He noted 
that one out of every four Cubans have savings accounts.

The Central Bank of Cuban informed that in order to update the 
banking operational systems, the banks would not open on 
Saturday, but will open up for normal operations on Monday.



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