(MENAFN- The Peninsula) -Cuba's central bank announced Thursday it would issue new currency beginning in next month, as it prepares for an overhaul of its economy and normalized relations with the United States.
The Bank of Cuba said that beginning February 1, there would be new 200-, 500-, and 1000-peso bills. Until now, the largest denominated bill has been the 100-peso note.
The move comes as Cuba prepares to do away with its dual peso system, and ahead of an expected increase in private investment, as it opens up its economy to the outside.
The planned currency overhaul is one of a series of recent economic reforms introduced by President Raul Castro in an attempt to modernize Havana's inefficient Soviet-era command economy.
For nearly 20 years, Cuba's has had two parallel currencies, one linked to dollars and the other not.
The dual system has been a bane to economic planners and a source of growing inequality between Cubans with access to dollars and those without.
Under the current system, Cubans with dollars can buy convertible pesos (CUC) at a one-for-one rate and use them to buy scarce goods in well-stocked special state stores.
Cubans' salaries, however, are paid in non-convertible pesos (CUP), which are valued at 24 to a convertible peso and do not go far in a country where doctors, for example, are paid $20 a month.
The government of President Raul Castro announced back in October 2013 that it planned to end the dual currency system - well in advance of the announced thaw with Washington last month - as a way to contribute to efficiency, bolster enterprises that export goods and services, provide a boost to businesses that produce for local consumption.
Currency reform is expected to happen relatively quickly in the wake of the announcement a month ago that Havana and Washington were ending a half-century of enmity.
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