Cuba to scrap two-currency system in latest reform Published duration 22 October 2013

image caption Many goods in Cuba are only available to those with access to the convertible peso, pegged to the US greenback

Cuba is to scrap its two-currency system in the latest financial reform rolled out by President Raul Castro, official media report.

Since 1994 Cuba has had two currencies, one pegged to the US dollar and the other worth only a fraction of that.

The more valuable convertible peso (CUC) was reserved for use in the tourism sector and foreign trade.

Now its value will be gradually unified with the lower-value CUP, ending a system resented by ordinary Cubans.

No fixed timetable

The Cuban economy is almost entirely state-run and the tourism sector has boomed since the collapse of the Soviet Union plunged Cuba into economic isolation and hardship.

The two-currency system was supposed to protect Cuba's fragile economy but angered locals paid in the much lower-value CUP and denied access to goods only available for those with convertible pesos.

The policy exacerbated the creation of a two-tier class system in Cuba which divided privileged Cubans with access to the lucrative tourist and foreign-trade sectors from those working in the local economy - all-too-visibly contradicting Cuba's supposedly egalitarian society.

The council of ministers has approved a timetable for implementing "measures that will lead to monetary and exchange unification", the official Communist Party newspaper Granma said.

Unification is "imperative to guarantee the re-establishment of the Cuban peso's value and its role as money, that is as a unit of accounting, means of payment and savings", it said.