When you travel or send money transfers to relatives living overseas, it’s helpful to understand how to exchange money from your home currency (dollars) into another currency and how that difference in value can affect what you pay or receive. Let’s explore how foreign currency exchange works in general and specifically when it comes to currency conversion into Cuban pesos.
What is currency conversion?
Currency conversion is simply changing one currency into another one. In most cases, foreign currency exchange rates vary according to many factors such as the state of the economy, inflation, interest rates and other market forces which is known as independent float. For a few currencies, the exchange rate is fixed either to another currency such as U.S. dollars (USD) or a “basket of currencies.” In Europe there is a monetary union (the Euro), which is another type of currency regime where more than one country adopts the same currency.
What are exchange rates and how do they affect you?
The exchange rate is the ratio of one currency to another. At the time of writing (May 2023) for example, the exchange rate of the USD to the Cuban peso (CUP) was 1: 24.00. This means that for every USD you convert, you would receive 24 Cuban pesos. Conversely, we can express the exchange rate of CUP:USD as 1:0.042 meaning each Cuban peso is worth 4.2 cents ($0.042).
When you know what the exchange rate between the two currencies is, you can use it to easily convert between them. Make sure you have the original currency first and the new currency second when doing the multiplication.
If the value of the dollar relative to the peso falls, you will receive more pesos for each dollar you convert. However, if the dollar strengthens, you will receive fewer pesos per dollar. Keep an eye on how the exchange rate is fluctuating so you can work out how your money transfer will be impacted.
When you send money from the U.S. to Cuba, you will incur a currency conversion fee. This is a charge made by your bank or exchange specialist for converting your dollars into Cuban pesos. It makes sense to shop around for the best deal as fees can vary significantly.
Rules around sending USD to Cuba
Sending money to Cuba from the U.S. is relatively straightforward again since we resumed our international money transfer service to Cuba in early 2023. However, there are still several restrictions around sending money to Cuba from the U.S., such as:
- Customers can send $2,000 USD per transaction (additional limits may apply). – The transactions are expected to be delivered the Next Business Day. Same-day delivery might be available if the transaction is submitted before the cutoff time (11:30 am EST) and it is dependent on the bank’s service availability.
- Deposits can only be made to MLC (Moneda Libre Convertible) accounts and MLC debit cards.
- Only non-commercial, family* remittances are allowed while send-to-self is not available.
- Customer transactions must be in full compliance with US regulatory requirements and may be subject to additional restrictions based on available remittance types. Available at selected locations.
*A close relative is defined as any individual related to the sender by blood, marriage, or adoption who is no more than three generations removed from that person or from a common ancestor with that person.*
Making Money Transfers to Cuba from the U.S.
To send money to Cuba, set up an online account with Western Union or download the money transfer app from your app store. Add your identification documents and payment card and you’ll be ready to send your first transfer. You can also make payments at one of our Agent locations throughout the U.S. If you need support setting up your account or making a payment, check out the FAQs in our Help Center.
