HAVANA (Reuters) - Cuba said late on Thursday it would start its long-awaited monetary reform in January, eliminating its dual currency and labyrinthine multiple exchange rate system in a bid to improve business conditions in the crisis-stricken economy.
Why do it all at once?
Economists expect triple-digit inflation, and government announcements in recent months suggest it does too. It has said the initial devaluation will be accompanied by a five-fold increase in average state wages and pensions even as many state-controlled prices are increased or allowed to respond to demand.
I have not looked in detail. They have distorted trade and a dual currency of some sort. They want to write off some part of the distorted economy, I suppose.
Whoops!
But the wage increase does not apply to around two million of the seven million-plus labor force in the private sector, informal sector or who simply do not work.Looks like it is a bit backwards. They are bailing out the public sector on the back of poor people. Not all at once! They must have inside pushing going on.
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