Money and prices in Cuba can be quite complex, following the history of the country’s currency system. Up until January 1, 2021, Cuba had the dual currency system, which included the so-called “tourist peso” (a misnomer). However, this dual currency system was eventually abolished. Thus creating a dual currency system (yes, that’s Cuban logic).

Afterward, a vibrant market for USD, Euros, and various other hard currencies emerged, leading to several implications. In this discussion, I will focus on the practical aspects, exploring the opportunities and challenges that travelers face.

Official rate

The government establishes an official exchange rate for the Cuban Peso, currently set at 120 Pesos to one USD. In relation to the Euro, the Cuban Peso’s value fluctuates in sync with the US Dollar.

When conducting transactions through official channels, you will be subject to the official exchange rate. For instance, exchanging 100 Euros at a bank or exchange office will yield approximately 12000 Pesos. If you withdraw money from an ATM (which are widely available), you will also receive around 12000 Pesos (minus any fees charged by your bank). You can find the official exchange rate here.

However, if you solely rely on withdrawing money from ATMs and use that for your expenses during your vacation, you might find your holiday becoming quite expensive. For instance, a beer on a terrace costs approximately 250 pesos, equivalent to about 9 Euros.

According to travel advice, it is often suggested that paying in Euros is the preferable option, and some sources may even state that as a tourist, you must use hard currency. However, this is far from accurate. The Cuban Peso is the official legal tender, and all establishments are required to accept it. This presents advantageous prospects for well-informed travelers who are prepared for the local currency.

Cheap or bloody expensive

I will illustrate the different payment methods and their price based on a beer on a terrace:

From 32,50 for 2,50

Paying for the beer with officially exchanged Euros would indeed result in a cost of 9 Euros. However, there is an important factor to consider when receiving change in Cuban Pesos. Typically, the establishment will use their own exchange rate, which is often around 40 Pesos per Euro. Let’s use this rate for illustration purposes.

Exchange rate invented

If you pay with a 10 Euro note, it would be converted to 400 Pesos, and you would receive 150 Pesos in change. This means you effectively paid 8.50 Euros for the beer, considering the exchange rate used.

Paying with a 20 Euro note would result in receiving 650 Pesos back, making the total cost of the beer 13.50 Euros.

However, if you were to pay with a 50 Euro note, the beer would end up costing you a whopping 32.50 Euros! This is because the change you receive in Pesos would be worth approximately 17 Euros.

I hope this information has captured your attention. If you’d like to continue reading, I’m here to provide further details.

Black market

The existence of an illegal informal foreign exchange market, commonly referred to as the black market, is worth noting. On this market, you can find a different exchange rate than the official one. However, it’s important to mention that engaging in such activities is illegal and carries substantial penalties. The black market rate is typically close to the mid-market rate, which can be found on websites providing unofficial exchange rates. Let’s assume, for the sake of this discussion, that the rate is 200. It’s up to 300 now but that doesn’t change the example.

If you were to exchange 100 Euros on the black market, you would receive 30,000 pesos. Consequently, if you were to pay for your 250-peso beer using this exchange, it would only cost you 0.80 Euros. This is significantly better than the range of prices we previously discussed, varying from approximately 8.50 to 33 Euros. It’s worth mentioning that this example assumes a specific exchange rate, and it’s essential to stay updated as exchange rates fluctuate.

The advantage of the black market exchange rate extends beyond just beer; it applies to various expenses such as coffee, lemonade, taxis, sandwiches, and virtually everything else. Considering the potential savings, you might find it useful to read our book’s dedicated chapter on the topic of money and payments. In fact, with the savings made from the first few drinks, the book’s purchase price could be quickly recouped.

Additionally, it’s worth noting that all state institutions that previously charged in CUC (Convertible Cuban Peso) have converted their prices to Pesos according to the official exchange rate.

Dead cheap

The Breakfast Buffet in Havana Libre used to cost 8 CUC and that was 7.50 in Euros. Now that same breakfast buffet costs 500 pesos and that is 2.20! If you pay at a state institution in Pesos, everything becomes dirt cheap. Private enterprise cannot cope with this competition and have to charge more. That produces a very skewed picture. On Plaza Veilla, one of the most beautiful squares in Havana, an espresso at Escorial (state) costs 40 Pesos and 150 at all other terraces… Add to your profit. Look at the prices and you know whether it is state or private. Now I have to add that the quality of the private places is usually higher and the service much better.

Please Prepare!

You see that it is important to read up before you go to Cuba. CubaConga really makes your holiday 70% cheaper and even more fun. Can only be ordered here and also with a not satisfied /money back guarantee… We explain how to find the black exchange market (if it does find you) and how to deal with it. What the pitfalls to watch out for are and even how there is a more elegant, legal way to get pesos. 

This is how you should handle those terrible Jineteros