Cuba

Cuba in the earlier years operated a monobank arrangement within its centrally planned economy. It had a difficult period in the early 1990s when its Soviet patron and supporter disappeared, and then moved gradually and reluctantly towards limited market reforms. A dual currency arrangement introduced in 1994, which contributed to and symbolised major inequalities, remained in place despite repeated announcements that it would be dismantled.

Years	Targets and attainment	Classification
1974-90	[tentative: no IMF sources, other comparable sources difficult to locate – comments welcome!] centrally planned economy with monobank undertaking central and commercial bank functions, plus some specialised banks; dual exchange rates, separate for trade with convertible and non-convertible currency (Soviet bloc) areas; dollar stores for foreigners	multiple direct controls MDC
1991-93	end of Soviet bloc in early 1990s brings major shock to Cuban economy with hyperinflation in informal market (formal prices frozen) and rising use and holding of USD (partly from remittances from abroad), which were legalised in 1993 (with dollar stores opened to residents)	unstructured discretion UD
1994-2017	1994 stabilisation includes introduction, supposedly temporary and with aim of limiting dollarisation, of Convertible Peso (CUC) fixed 1:1 to USD via currency board arrangement (up to 2003 only), alongside Cuban peso (CUP) eventually stabilised for households and tourists at CUP 24 = USD 1 but kept at 1:1 for SOEs; 1997 new laws allow establishment of Central Bank of Cuba, also (more) state-owned commercial banks (some previous specialised banks) and (from 2005) a Venezuelan-Cuban state-owned bank (which all lend mainly to SOEs); central bank sets term deposit interest rates but interbank market fails to develop, no government bonds are issued and main monetary instruments remain direct (in form of exchange rate controls, forex sales and purchases in CADECA (state-owned small-scale forex market), and reserve requirements); 2003-4 all forex transactions to be concentrated in central bank, USD to be replaced by CUC though residents can still hold USD (but 10% charge on USD conversions); 2008 major balance of payments, exchange rate and financial crisis triggered by GFC, overcome by sharp stabilisation plan (and some external debt forgiveness), plus institutional reform; some ongoing limited wider liberalisation; dual currency arrangement generates sharp inequality between those with access to CUCs and those without; late 2013 and again late 2017 target of exchange rate unification announced, but no date for implementation; major outstanding statistical issues	loosely structured discretion LSD

Selected IMF references: none (Cuba was not and is not a member of the IMF).

Other references: Central Bank of Cuba website https://www.bc.gob.cu/; Dreher (2009); Vidal and Gonzalez-Corso (2010); Perez and Vidal (2010); Perez (2011); de la Torre and Ize (2014); Vidal and Perez (2014); Orro (2016); Luis (2018); Linde (2018).