Cuba operates a dual currency system with the Cuban Convertible Peso (CUC) and the Cuban Non-convertible Peso (CUP or national currency) both being legal tender. You cannot buy or sell Cuban currency outside of Cuba.

As a general rule all goods and services which a foreigner pays for will be in CUCs. This includes all hotels, flights, buses and virtually all shops, restaurants and bars. In general the only case when a foreigner will use national currency is at the agricultural market, buying street food, taking collective taxis and going to the cinema or other events.

National currency (CUPs) are used mainly for Cubans paying for basic food, rent, utility bills, local transportation, events and certain national currency shops. Virtually all goods in hard currency shops are priced in convertible currency with no option for payment in national currency for Cubans or anyone else.

Anything you do pay for with National Currency (CUPs) will generally be extremely cheap when converted back into hard currency.

The CUC is pegged to the USD at a rate of 1.08 (buy) 1.04 (sell)
US$ 100 = CUC 92 (buy)
CUC 100 = US$ 104 (sell)

In additional to the exchange rate difference there is a 10% tax on exchanging US$ cash. This means that for US$ 100 you will receive only CUC 82. You should avoid brining US$ cash. Bring Canadian Dollars, Mexican Pesos, Euros or British Sterling. Exchange rates of the CUC with other currencies (ie Canadian Dollar / Euro) vary with the US$ exchange rate movement against those currencies (plus 8%).

There is no difference in exchange rates offered at CADECAS (state owned exchange bureaus) or state owned banks (BFI, Banco Metropolitano). Hotels generally offer much worse rates than CADECAS or banks and should be avoided. The airport Cadeca offers basically the same rates as in the city.

Do not exchange money unofficially on the street, you will not obtain a better exchange rate than that offered officially.

When you are leaving at the airport you may be offered at the exchange bureau to sell CUCs at 1:1 with the USD. This is shortchanging you by 4%. If you have CUC 100 you should receive US$ 104 and not US$ 100).

The 8% difference between the CUC and the USD is not a tax or a commission but an exchange rate difference. There is no inherent reason that 1US$ should equal 1CUC. This is a similar system used as in the Cayman Islands where the Cayman Dollar is pegged to the US$ but worth 20% more.

CASH
Cash is king in Cuba. Most places do not accept credit cards. High denomination bills (anything higher than CUC 20) may also prove difficult to change). Try to avoid taking US Dollars to Cuba, there is a 10% tax on changing US$ (although no other currencies). The best currencies to take are Canadian Dollar, Euros or Sterling.

CREDIT CARDS / ATMS / TRAVELER’S CHECKS
Visa & MasterCard are accepted provided they are not issued by a US Bank. The amount charged to your credit card will be in US Dollars. This will be calculated at 11.5% more than the CUC amount.

8% of the 11.5% uplift is an exchange difference which you also pay on traveler’s checks or cash and is not a tax / commission but an exchange difference. The balance of 3.5% is a commission / tax payment for the use of the credit card.

You can get cash advances on your credit card over the counter in banks, CADECAS (exchange houses) provided that you show your passport or at a limited number of ATMs.

Traveler’s checks are accepted at most banks / Cadecas provided that they are not US Issued. Commissions vary from 3-6% and given that they cannot be replaced within Cuba provide only limited utility.

As on 6/09/2007