The convertible peso (sometimes given as CUC$) (informally called a chavito), is one of two official currencies in Cuba, the other being the peso. It has been in limited use since 1994, when it was treated as equivalent to the U.S. dollar. On November 8, 2004, the U.S. dollar ceased to be accepted in Cuban retail outlets leaving the convertible peso as the only currency in circulation in many Cuban businesses. Officially exchangeable only within the country, its value is currently pegged to $1.08 U.S. The convertible peso is, by the pegged rate, the tenth-highest-valued currency unit in the world and the highest valued "peso" unit.
From 1993 until 2004, the Cuban currency was split between the Cuban peso (the currency Cuban citizens are paid in and used for staples and non-luxury items) and the U.S. dollar in combination with the convertible peso, which was used for tourism and for luxury items.
On November 8, 2004, the Cuban government withdrew the U.S. dollar from circulation citing the need to retaliate against further U.S. sanctions. After a grace period ending on November 14, 2004, a 10% surcharge began to be imposed when converting U.S. dollars into convertible pesos. The change was announced some weeks beforehand and was extended by the aforementioned grace period (it has been claimed this was because the amounts of US dollars being exchanged were more than anticipated).This measure helped the Cuban government collect hard currency.
In 1994, coins were introduced in denominations of 5, 10, 25 and 50 centavos, and 1 peso. 5 pesos (rarely seen) were introduced in 1999, followed by 1 centavo coins in 2000.
In 1994, the Banco Central de Cuba introduced notes in denominations of 1, 3, 5, 10, 20, 50 and 100 pesos.
Historical exchange rates
From its introduction until 2005, the convertible peso was pegged to the U.S. dollar at 1:1. On March 24, 2005, the central bank increased the value of the convertible peso by 8% making one convertible peso worth 1.08 USD.
A 10% tax is applied when exchanging U.S. dollar banknotes, in addition to this 8% increase, and an exchange commission, meaning that one convertible peso will cost more than US$1.20. The 10% tax is not applied to other currencies, nor does it apply to bank transfers or credit card payments.
For transactions using credit cards, the cards are charged in U.S. dollars at an exchange rate of 1.1124. This combines the 1.08 rate with an extra 3% service charge.
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