Fidel: Happy Days Are Here Again

In Series Of Speeches, Castro Promises Cubans A Better Life

(CBS) 
In two moves by the Central Bank, and announced by Castro in his latest speeches, Cuba first upped by 7 percent the value of the original Cuban peso against the CUC and then raised the value of the CUC by 8 percent against the dollar effective April 9.

Castro pointed out the benefits of this by explaining how he'd just brought down the price of the new pressure cooker by 15 percent. His reasoning was as follows: the state picked up half the cost of the imported pots and converted the remaining 50 percent into its price in Cuban pesos.

By raising the value of the peso 15 percent, the state was also lowering the cost of the pot 15 percent so that instead of paying 150 pesos, consumers would only have to pay 122.50.

The day after Castro spoke, Cuba's Central Bank President Francisco Soberón elaborated on the measures.

"The decision to reevaluate as of April 9, the rate of exchange between the Cuban Convertible Peso and foreign currencies, and to eliminate the parity between this national currency and the U.S. dollar is part of a coherent, gradual and prudent strategy that the country will continue for the benefit of the people," he said.

Like Castro, Soberón charged that the sustained depreciation in the value of the U.S. dollar plus the Bush administration's increasing hostility toward the island has made it risky for Cuba to use the dollar as a means of payment or in its national reserve.

But the moves have unnerved many of the estimated 60 percent of the Cuban public with access to either U.S. dollars or other convertible currencies, such as the EURO, sent by relatives living outside the island or earned through their work. Estimates on just how much Cubans receive range widely from $400 million to over $1 billion.

"Fidel's speech was great but he dropped a bomb at the end, the reduction of the chavito, people lost thousands of pesos," went one opinion read by Castro on the 7 percent increase.

Previously people who bought Cuban pesos with CUCs received 26 for one, now they are only receiving 24. It doesn't sound like much of a difference but if they changed 100 CUCs they got 200 pesos less under the new rate. And many people count on the dollars sent by their relatives to help them pay the often high prices at the farmers markets where private vendors sell everything from lettuce and tomatoes to pork in pesos.

The state, aware of this, opened CADECA, the semi-official money exchanges at the entrances to farmers' markets.