updated 11/8/2004 3:05:43 PM ET 2004-11-08T20:05:43

After a decade as the dominant currency to buy everything from shampoo to canned food to furniture, the U.S. dollar is no longer accepted in Cuba as of Monday.

Cubans as well as tourists visiting the island must now use a local currency tied to the dollar to buy goods at previously named "dollar-only stores" selling food and personal hygiene products. The dollar will also be rejected at restaurants, art markets, hotels and other businesses.

Cuba's communist government announced the decision to eliminate the dollar from circulation Oct. 25, prompting thousands of Cubans to flood banks and exchange houses to turn in their dollars for Cuban convertible pesos.

A 10 percent surcharge to convert the U.S. currency into pesos was also originally to be implemented Monday, but because of the huge demand to dispose of the U.S. bills, the Central Bank extended to Nov. 14 the period that people could exchange without paying the surcharge.

The surcharge will not apply to other foreign currencies like the euro or the Canadian dollar, and there will be no surcharge to buy U.S. dollars.

Cubans and tourists in Old Havana lined up outside exchange houses and swelled out of banks Monday to convert their dollars. People in the street were entertained by a dachshund named Pillo Chocolate who barked at currencies other than the convertible peso.

"Before, Pillo would reject any currency that wasn't the dollar," said Roberto Gonzalez, the dog's trainer. "But in the last week I trained it to accept the convertible peso. It knows it has to adapt too."

After sniffing a convertible peso, Pillo Chocolate swiped the bill with its paw in approval.

Cubans also appear to have accepted the government measure with little complaint.

"For me, it's the same, whether I use the dollar or the convertible peso," said Javier Fernandez, 50, a self-employed handyman. "All I need is the currency that will allow me to eat."

Cubans will now use the convertible peso to purchase goods they have been buying with dollars since they were made legal tender in 1993 to help capture hard currency after the loss of Soviet aid and trade.

Among such goods are groceries like cereal, yogurt and bottled water as well as most toiletries. Washing machines, furniture and gasoline have also been sold in dollars.

The Cuban convertible peso, like that of many other smaller nations, has no value outside the country. There also exists another currency on the island — the regular Cuban peso — but it has little value inside the country and is used mainly to buy fruit and vegetables as well as gain admission to concerts, museums and movie theaters.

In announcing the currency switch, President Fidel Castro said widespread use of the money of his country's No. 1 enemy — the United States — would be halted to guarantee Cuba's economic independence.

Castro said the move was necessary to protect the island nation from an increasing U.S. crackdown on the flow of American currency into Cuba.

The United States has recently implemented severe limits on the amount Cuban exiles can send relatives on the island and Federal Reserve fines imposed on international banks sending U.S. dollars here.

Cubans can still hold the American currency. Some independent analysts believe many with savings will continue hoarding some of their dollars at home.

"Nobody really knows how much U.S. money Cubans have, but it is substantial," said Paolo Spadoni, a Cuba expert from the University of Florida in Gainesville.

A report authored by Spadoni last year roughly estimated that at least $500 million was being stored in Cuban homes, most of it money received from relatives in the United States.

Central Bank President Francisco Soberon told the Associated Press last week that authorities were surprised to see how many dollars Cubans have been "saving under their mattresses."

Soberon, however, declined to provide figures on how many dollars have been exchanged or deposited since the currency switch was announced.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com