It means that after Nov 8th, the currencies in Cuba will be nacional pesos and convertible pesos. The latter being pegged at 1cp=$1US
Anyone exchanging US $ for convertible pesos after that date will get hit with a 10% exchange charge.
So, it means coming into Cuba with Euros or Canadian dollars etc.
You'll still need to exchange them for cp's but at the exchange rate set in Cuba. From my experience they pretty much charge you what a bank would in your own country.
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Associated Press
Update 7: Cuba Moves to Stop Trade in U.S. Dollars
10.25.2004, 10:18 PM
Cuba announced that U.S. dollars will no longer be accepted
at businesses and stores on the communist island starting
next month in a move that will radically change the way
cash transactions have been done here over the past decade.
The resolution announced Monday by Cuba's Central Bank
seemed aimed at finding new sources for foreign reserves as
the U.S. government steps up efforts to prevent dollars
from reaching the island as part of a strategy to undermine
Fidel Castro's government. Cuba's national currency, the
peso, cannot be used with international partners.
"Beginning on November 8, the convertible peso will begin
to circulate in substitution of the dollar throughout the
national territory," Castro said in a written message read
by his chief aide Carlos Valenciaga.
In his message, Castro asked Cubans to tell relatives
living abroad to send them money in other foreign
currencies, such as euros, British sterling or Swiss
francs.
The move was likely to hurt mostly those Cubans who receive
American dollars from relatives living in the United
States.
Cubans and others on the island can still hold dollars in
unlimited quantities and can change them into pesos before
the new policy takes effect. But they will have to pay a 10
percent charge to exchange dollars afterward.
"In the short term, there may be a slip in the
remittances," said John Kavulich, president of the
U.S.-Cuba Trade and Economic Council, which tracks business
between the two countries. Some estimates on annual
remittances to Cuba are as high as US$1 billion (euro780
million).
"But going into the holidays, people in Miami and New
Jersey won't want the holidays for their families on the
island to be even more miserable," he said, predicting
remittances from those major Cuban American communities
would pick up again, despite the difficulty of sending them
and the 10 percent charge.
Kavulich said the timing of the announcement seemed aimed
at drawing attention to Cuba shortly before the U.S.
presidential election.
"The Cuban government is hoping that (U.S. Sen. John) Kerry
will win and that by announcing this a week before the
election it will keep Cuba in the news and relevant," said
Kavulich.
He said that because Havana is blaming this new economic
measure on the American sanctions, the debate over the U.S.
trade embargo will be in the public eye when the elections
occur.
Cuba also has been seeking to draw attention to the U.N.
vote scheduled for Thursday on condemning America's trade
embargo against the communist nation.
The U.S. dollar has been a primary form of currency in Cuba
since the early 1990s, when the island government was
forced to implement liberal reforms to cope with the loss
of Soviet aid and trade. The possession of dollars was
legalized in 1993 to draw hard currency from tourism and
from family purchases at state stores.
The government said the change is necessary to protect its
economy as the administration of U.S. President George W.
Bush seeks to punish banks and businesses that ship
American dollars to Cuba, which has been under a U.S. trade
and financial embargo for more than 40 years.
Those U.S. measures, which went into effect this summer,
were designed to reduce hard currency on the island by
limiting how often Cuban-Americans can visit relatives,
decreasing how much they can spend, and prohibiting money
transfers to Cuban officials and Communist Party members.
Castro looked animated, despite the bright blue sling he
sported over his olive green uniform to support a broken
right arm. Castro has made a point of remaining involved in
government affairs since accidentally falling Wednesday at
a speech, also shattering his left kneecap.
The measure was tied to the U.S. Federal Reserve's decision
in May to fine Switzerland's largest bank, UBS AG, US$100
million for allegedly sending American dollars to Cuba,
Libya, Iran and the former Yugoslavia in violation of U.S.
sanctions against those countries. UBS agreed to pay the
fine without admitting the allegations.
Cuba also blamed stepped up American sanctions against the
island in May when it increased prices from 10 percent to
30 percent on everything from cigarettes and cooking oil to
refrigerators.
In another move aimed at capturing more foreign currency
for government reserves, Cuban state companies last year
stopped conducting business with each other in U.S.
dollars. Any hard currency received from exports or sales
had to then be sold to the central bank.
The U.S. embargo was imposed in 1963 in the wake of Fidel
Castro's defeat of the CIA-backed assault at the Bay of
Pigs two years earlier. Americans are barred from traveling
to the Caribbean island nation except with a U.S.
government waiver.
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