Havana, August 5 Advisor of the President of the Cuban Association of Economists, Joaquin Infante said in an interview published today by the newspaper Granma that to have one currency and one exchange rate in this country is pressing.
In October, 2013, the same newspaper published an official press release, in which the Government announced the implementation of measures aimed at unification of currencies and having one currency and one exchange rate. The newspaper insisted that they clarified in the most recent parliamentary sessions that the mentioned process has the intention of reestablishing the value of the Cuban peso, although that measure alone would not solve all problems of the Cuban economy.
He said the measure would allow having an exact dimension of the profitability and competitiveness of productions, as well as measuring with greater objectivity all the macroeconomic indicators. Infante said that although the phenomenon could be due to structural or circumstantial reasons, both coincide in Cuba.
Among the former reasons, he mentioned extreme dependence on foreign trade and little foreign-currency reserves in the country, and among the latter, the US economic and trade blockade of Cuba and fluctuation of the prices for imports and exports of products in the international market. He said it was a more complex situation, due to the appreciation of one CUP (Cuban peso) equivalent to one CUC (Cuban convertible currency) for the State’s economic-financial relations; and 25 CUP equivalent to one CUC for the population.
He said these factors do not contribute to have a clear vision of the cost of the productions, distort the information to carry out feasibility studies and economic assessment of investments, and among other consequences, make imports and exports to be underrated. Asked why this moment was chosen to implement having one currency and one exchange rate, the expert did not hesitate to say there was a pressing need for this process, which should have been enforced long time ago, he said.
The best strategy is eliminating the two exchange rates in the State operations. He also drew attention on the existence of a third currency in that sector, the so-called Liquidity Chart (CLC), which identify the value of CUC in foreign currency. According to him, that has happened due to the issuing of more CUCs (convertible pesos) that their value in foreign currencies.
Despite the so-complex panorama, the economist considered that the effects of having one currency and one exchange rate for the State operations will be seen soon. However, its impact on the population will be gradual.
He explained that elimination of the two currencies alone would not increase the people’s purchasing power. Appreciation of the Cuban peso is tightly related to increasing productions, work efficiency, competitiveness and profitability of productions.