Sorry, another money question... but maybe a different one!

Hello all

I'm off to Cuba on 27th May after 6 months of research. Am into architecture, art, culture, photography and just soaking up the general atmosphere... In two wees, just sticking to Havana, Vinales and Trinidad. :)

I'm in the UK and as the USD is so weak aganst the pound at the moment would it be better to take $ with me (and incur the 10% charges) or will i get a better rate of exchange with good old British pounds?

Thanks in advance

Sonia

Since you're already in the UK, it's easy for you to do the math yourself.

Check exchange rates for buying CUC here and see which works best.

have fun.

Cheers,
Terry

<blockquote>Quote
<hr>the USD is so weak aganst the pound<hr></blockquote>
That has nothing to do with Cuban Exchange, they have a formula based on world ($1.00 CUC + $1.08 USD$) markets on the day.

If you bring US currency they whack it an extra 10% they don't whack a pound or a shilling or a frank or a yen ... get it?

But you still get more Pounds for the US$ if the Pound is stronger. And that translates to more CUC. Of course it matters.

"... But you still get more Pounds for the US$ if the Pound is stronger..."

I'm sure you meant to say weaker, but yes, your point is well taken.

Being in the UK, the OPer knows what Pounds will cost her, then she can look at the exchange rate table and see what's better - doing a double conversion, or taking the 10% hit.

Cheers,
Terry

Forget the amateur economics! The object is to get from your home currency, sterling, to the target currency, CUC. The cost is the number of transactions involved. Since you can do this directly in a single transaction: that is what you should do!

It's a no-brainer.

"Since you're already in the UK, it's easy for you to do the math yourself.

I have NO idea what that means: the OP is presumably British, but I never knew them to be particularly mathematical. (Brits call it 'calculation' and refer to 'maths,' right?) "Since you're already in the UK, it's easy for you to look at this Cuban website" is also flaky.

As noted: TAKE POUNDS STERLING. Your transaction costs will be invariably lower with your own, rather than any other currency you might buy.

Let me explain it to you, EA.

1.) Since the OP is in the UK, it's easy for her to walk into a bank, and see how much it'll cost her to buy Sterling.

2.) She can then look at the Banco Metropolitano link, and easily calculate how many CUCs that Sterling will buy.

3.) At the same time, using the same link, she can easily calculate how many CUCs her USD will buy.

This is a simple, accurate way for her question to be answered.

Cheers,
Terry

Let me explain it to you, CT:

Since the OP is FROM the UK (easily deduced from her post), why would she walk into a bank, and "see how much it'll cost her to buy Sterling" ? People holding POUNDS dont need "to buy Sterling." Pounds ARE Sterling!!!

I can't believe I am explaining this to a CANADIAN. Oh, nevermind ... have another mojito and go back to taunting that other guy.

I understood the OP as Sonia being an American in London, thus the question about US dollars verses Sterling.

In any case, it's immaterial what her nationality is. Whether she's a Brit or an American she has the tools and advice she needs to decide which currency to take. No big deal.

All you've done on the thread, as usual, is make a bunch of noise.

Cheers,
Terry

OK, I was ready and braced for the abuse....

To clarify, I'm British, so yes home currency is £. I will have minimal cost in changing my £ to $ as I work for a travel company.

Thanks for the links to the currency exchange sites, I'll do 'the math'.....

Thanks :)

Thanks for the calcification, Sonia.

Since the USD has been taking a beating against GBP lately, and you're in a unique position to buy dollars cheaply, it'll be interesting to see what the math finally spits out.

I can't imagine anything beating taking GBP and buying CUC directly, but who knows.

Please let us know what your calculator finally tells you.

Have a nice trip.

Cheers,
Terry

Thank you very much Terry! :)

Right, here goes...

so according to that website,
1GBP = 1.79890 CUC
1US$ = 1.11341 CUC

My exchange rate is 1GBP = 1.94US$.

So, say we had 100GBP and took it to Cuba, we'd get 179.89 CUC.
If we converted that to US$ at home we'd have $194 which, when converted in Cuba, would become 216 CUC.

I haven't deducted another 10% as I didn't know if this was already accounted for on that site? With an extra 10% deducted from the dollar transaction, our $194 would cost $19.40 to exchange, leaving us with: $174.60 to convert which becomes (rather scarily) 194.4 CUC.

That's still 15 CUC better, about 8% or so...

How controversial!

Thanks

Sonia

Excellent work Sonia. So nice to see someone who isn't afraid to crunch numbers.

One small problem though... do you see the asterisk (*) beside GBP and EUR? That differentiates those two currencies from all others.

In other words..... 1 GBP = 1.79890 CUC and 1 EUR = 1.22112 CUC..... but it takes 1.11341 USD to buy 1 CUC, and 1.24979 CAN to buy 1 CUC, etc...

Sorry to screw up your day. :-)

Cheers,
Terry

Okay, so the exchange rate for $ is as follows:
$1.11341 = 1 CUC
We'd be changing $174.60 in CUC which would give us 156.8CUC compared with 179.89CUC from the same 100GBP.

Pounds win.

Thought there was something dodgy with that table!!

Thanks for all your help Terry!

Home currency (if it's accepted in Cuba) always wins, but it's nice to see it proven every now and then. The recent shit-kicking the USD has taken against GDP, and your ability to buy cheap USD, made this exercise interesting.

Have a great trip.

Cheers,
Terry

Good one #13 & 14

Sonia

I think you did one of the conversions backward in Post 12

Fidel insists the CUC is worth $1.08 USD. So the calculation below is wrong
"So, say we had 100GBP and took it to Cuba, we'd get 179.89 CUC.
If we converted that to US$ at home we'd have $194 which, when converted in Cuba, would become 216 CUC"
Should be:
If we converted that to US$ at home we'd have $194 which, when converted in Cuba, would become 179.62 CUC
Take 10% off of that and you get 161.70 CUC. which is a lot less than the 179.89 you would get if you went direct to Cuba with your pounds. This is because of the extra 10% - which is not an exchange - it is a penalty charged in Cuba for converting USD cash - because they have difficulty converting it to other currencies again because of US govt restrictions.
Regards
Donald

I have been following this thread with less and less interest as it proceeds and as soon as I go and find the release mechanism to get away from it, I won't be bothered with it anymore at all. You can continue your public math lesson all by yourself!

However, the statement:

<blockquote>Quote
<hr>This is because of the extra 10% - which is not an exchange - it is a penalty charged in Cuba for converting USD cash - because they have difficulty converting it to other currencies again because of US govt restrictions.<hr></blockquote>

Is total BULLSHIT !! I have NEVER seen anything so pathetically untrue posted here. The extra 10% is a specific, directed tax by Fido & Co directed at US currency! Most foreign visitors can avoid this by using a different currency. Cuban-Americans sending remittances to their families can not easily do so.

Wow, davfitz: what an outburst! LOL Can't fathom what got you so outraged - the word "penalty"? (Tax, surcharge, penalty: for practical purposes here, all the same. The "Dollar Tax" was actually called a "Dollar Ban" in the media, if quibbles get you so inflamed. Yikes!) But I'll follow your tangent, anyway.

According to researchers at the Mises Institute, the timing of the Dollar de-legalization followed a raft of new U.S. Treasury new measures to enforce the myriad of monetary regulations of the Embargo. <blockquote>Quote
<hr>Consistent with the intent of the embargo to "isolate the Cuban government economically and deprive it of U.S. dollars," the countless stipulations include prohibiting foreign commercial banks that deal in dollars to exchange Cuba's old U.S. dollars for new ones. UBS, Switzerland's largest bank, for instance, was fined $100m by the Federal Reserve for illegally transferring freshly printed dollar notes to Cuba, Libya, Iran and Yugoslavia-all of which are subject to U.S. sanctions. Exchanging worn dollars for crisp ones enables said countries to renew their stock of dollars in circulation, thus increasing the longevity of the dollar's durability and the stability of their economies.<hr></blockquote>
The falling Dollar, a long term trend ("colossal current account and budget deficits, rampant money creation," etc.) was extra incentive to de-legalize the dollar at that time, and "[using] hard currencies such as euros, sterling, Canadian dollars, and Swiss francs in lieu of dollars is much more advantageous to the Cuban government; better time than any for Castro to accumulate as many dollars as possible and convert them into a more stable currency." Rail against that opinion if you will, but that's what happened and what a fiscal conservative would conclude "why."

btw, since 4/02 the USD$ has lost 35% of its value against the Euro, 28% against the Pound and Cdn$, respectively. It made sense for the Cuban govt to convert USD stocks to other currencies, and tax "Dollar importers" for the extra burden, all those costs to Cuban financial institutions in moving & storing physical USD bills. Admittedly, that's something most US banks dont even worry about, most of our money is electronic, but all these little transactions do have costs & fees. Read the fine print.

US Treasury restrictions on USD cost Cuba; that is the goal, and Cuba admits it. US Customs spends more time quizzing me about currency than anything else, btw: that's practically all THEY care about, too! Its not just an obsession of 'Fido& Co.' as implied but yes, this particular currency tax is a nuisance. What tax isnt?!

Where is pelododo when you need him to pimp for Duales?

EA:
I was really expecting you to finish your post # 19 with your all time ever lasting best statement during 2007…so far:

“I can't believe I am explaining this to a CANADIAN”

Just allow me to add a “little” million dollars detail:

Among the “the countless stipulations” included as well the decision not to allow to visit Cubans residing in the US for yearly periods anymore but for every three taking that way from the Cuban economy 2/3 of what those fellow compatriots used to spend while in here..not only what they used to send before which was also targeted BTW. So you may think” this particular currency tax is a nuisance” but it was a very smart nuisance which should then be considered as another step in the successful retaliations that for more than 48 years the tinny local government has been applying to laugh about the mistaken results coming from the useless and non working policies of a Superpower neighboring country.

Hey believe me, I know I am not explaining this to an American!...lol….

Ja, Canadian blowhards shouldnt need to have taxes explained to them. Or why Brits dont buy Sterling, Jeez! In his rage, Davfitz ignored the context & history of the 'Dollar Tax,' which had yet another purpose ('recoup,' as you've pointed out.) Hey, the Dollar Tax SUCKS for me too, but I wont deny its economic utility to the Cuban Govt.

Washington cannot outmaneuver Havana, and Uncle Sammy has failed in nearly every effort to do so in the last half century or so: Goliath is far too clumsy? US Cuba policy is driven by lunatics, fascists, terrorists & mafia? C-As might be good managers at McDonald's, but they shouldnt be managing US foreign policy.

I was out for several days, and I have no experience with other countries currencies, but I felt compelled to post something here.

Shouldn't someone offer the OP a means by which they can front-load their British Credit Card so that they don't have to worry about carrying cash everywhere with them?

I feel better now.

P.S. I enjoyed the math. It's such a pleasure to see someone get it right for a change.