The Cuban Central Bank (BCC) has openly acknowledged that the introduction of two new banknote denominations—2,000 and 5,000 Cuban pesos—stems from rising prices and an increased demand for money in circulation. This admission reflects the daily hardships faced by Cubans due to inflation eroding their purchasing power.
In a straightforward televised interview, Julio Antonio Pérez Álvarez, the director of issuance and values at the BCC, stated, "The Central Bank is examining the monetary structure to address the demand driven by price increases and the surge in circulation."
The 5,000 peso notes began circulating in Havana on Wednesday through the Banco Metropolitano, with plans for a gradual rollout across the country. The 2,000 peso notes will follow in a similar progressive manner, according to the official.
New Banknotes: A Response to Economic Strain
Pérez Álvarez outlined four reasons for this measure: to enhance public service, meet the money demand caused by rising prices, reduce logistical costs, and streamline banking operations.
This acknowledgment stands in stark contrast to the official rhetoric that downplays the severity of the economic crisis. It comes at a time when the Cuban economy has contracted more than 15% since 2020, with a further 5% decline expected in 2025. At the current informal exchange rate, a 5,000 peso note is worth merely about 10 dollars, while a 2,000 peso note amounts to around four dollars.
Economic Hardships Exacerbated by Cash Shortage
The minimum wage has been stagnant at 2,100 pesos since 2021, and the average salary is approximately 6,989 pesos per month—barely covering 15% to 22% of the basic food cost for two people in Havana, estimated to exceed 41,000 pesos monthly.
The cash crisis further complicates the situation: Havana has lost more than 50% of its ATMs, a problem mirrored across other provinces. Citizens report waiting up to three days to access a functioning ATM.
Bank withdrawal limits may force individuals to wait months to access their deposited funds, a problem the forced banking plan initiated in 2023 has failed to resolve.
Public Reaction and Historic Features of New Notes
The public's reaction to the new banknotes has been marked by sarcasm: "My salary on a single bill," wrote Cubans on social media on the day of the announcement. The group Fuera de la Caja was more blunt in its assessment: "A piece of paper doesn't solve anything."
For the first time in Cuban numismatic history, the new banknotes feature images of women: Mariana Grajales Cuello on the 2,000 pesos note and Celia Sánchez Manduley on the 5,000 pesos note, along with security features like motion-effect threads, watermarks, and enhanced braille codes to prevent wear from handling.
Understanding Cuba's Economic Challenges
Why did the Cuban Central Bank introduce new banknotes?
The Cuban Central Bank introduced new banknotes to address the rising prices and increased demand for money in circulation, as inflation severely impacts the purchasing power of Cubans.
What are the economic conditions in Cuba?
Cuba is experiencing a severe economic crisis, with a more than 15% contraction since 2020 and an expected 5% decline in 2025. Inflation and cash shortages are exacerbating the situation.
How has the public reacted to the new banknotes?
The public response has been sarcastic, with many Cubans expressing that a single bill now represents their entire salary, highlighting the disconnect between government measures and the economic reality.