Money is a complicated matter in Cuba and so are prices.
Until January 1, 2021, we had the fable of the dual currency. Here you can read the history of the (completely incorrectly named) tourist peso.
In fact, there was never a dual currency until Cuba abolished the dual currency.
Then suddenly there was a lively trade in USD, Euros and all kinds of other hard currencies.
With all its consequences.
I will spare you the whole story and focus here on the practical side and on the possibilities and problems that this offers you, as a tourist.
There is an official exchange rate of the Peso which is set by the government at 24 Pesos to a USD. Compared to the Euro, the Cuban Peso moves along with the US Dollar.
Everything you do via the official circuit goes via the official rate. If you exchange 100 Euro at an exchange office or a bank you get (at the moment) 2700 Pesos. If you get money from the ATM 100 (ATMs everywhere) you get 2700 pesos (minus some costs that your bank charges. Here you will find the official exchange rate.
If, as at any holiday destination, you just use the ATM and pay with the money you withdraw, your holiday will become very expensive. A beer on a terrace costs about 250 pesos, so that’s 9 EURO!
A lot of travel information claims that it is best to pay in Euros and some sites even claim that as a tourist you have to pay in hard currency. Nothing is less true. The Peso is legal tender and everyone has to accept it. And that offers opportunities for the prepared traveller.
Cheap or bloody expensive
I will illustrate the different payment methods and their price based on a beer on a terrace:
With officially exchanged Euros, that beer will cost you 9 Euros.
If you pay for the beer with a note of 10, the restaurant conjures up an exchange rate and gives you change based on that. That exchange rate is usually between 35 and 50 so lets use 40 in this example. You pay 10 Euro, which becomes 400 Pesos and you get 150 Pesos in change. I will explain later that you have now paid 8.50 for a beer.
If you pay with a 20 note you get 650 pesos back and your beer has now cost 13.50.
If you pay with a 50 note, the beer will cost you 32.50! EUROS!!! 32.50Euros for a beer… Because the change you got (in Pesos) is worth about 17 Euros.
Do I have your attention to continue reading or do you think that’s fine?
The black market
There is an illegal informal foreign exchange market. Here you will find the current informal exchange rate. If you exchange informally you will never be able to get that rate but you will be close. For example, today the informal exchange rate on the black market is 112. Since that’s the mid-market rate, you need to subtract about two percent from that plus the trader’s margin. (It’s illegal trading and there are heavy penalties for it so he also has to earn some money for the risk he takes.) Good exchange rate for you, at a midpoint of 112 it should be slightly below a hundred but lets, for the rest of this article take, that rate of a 100. The Euro is on an upward trend so by the time you come to Cuba, if not early March 2022, this example is wrong and the difference has become more extreme.
So if you exchange 100 Euros on the black market you get 10000 pesos…
So if you pay for your 250 beer with that, it will cost you 2.50 Euro… That is really a lot better than ‘somewhere between 8.50 and 33!!! It is not without reason that we devote an entire chapter in our book to the theme of money and payments. Might be useful to read that? You earn back the purchase price with the first beers… If you don’t drink beer, this example also applies to coffee, lemonade, taxis, sandwiches and basically everything. See an overview of a reasonable budget.
To make things even more fun, all state institutions, which used to charge in CUCs, have converted their prices to Pesos according to the official exchange rate.
The Breakfast Buffet in Havana Libre used to cost 8 CUC and that was 7.50 in Euros. Now that same breakfast buffet costs 220 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 25 Pesos and 100 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 slightly higher and the service much better.
You can even book Hotels with Cuban travel agencies… In pesos! An all inclusive in Varadero, four stars… 1500 pesos p/p per night… If you book it on the internet you end up with 80 Euros for the same room in the same hotel…
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