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- BBC News World
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Image source, Getty Images
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Foreign tourists will not be able to use dollars in Cuban banks to obtain local currency.
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The Central Bank of Cuba (BCC) “temporarily” suspended cash deposits in dollars on the island, a measure that applies to both Cubans and foreigners, state media reported on Thursday.
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The measure will take effect next June 21, the day when Cuban banks will no longer be able to receive dollars to be deposited or exchanged for national currency.
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The decision, said the BCC, is produced “before the obstacles to the economic blockade of the United States so that the national banking system can deposit cash in dollars abroad Americans that is collected in the country, “reported Granma.
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Image source, Getty Images
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“It is a measure of protection of the Cuban financial system, which is applied only to the currency of the United States in cash. Not to the existing accounts in that currency,” the publication stressed.
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Deposits in other foreign currencies will not be affected. Electronic transfers in dollars are also not prevented.
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The BCC did not indicate the date on which the restriction will be lifted.
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Why the restriction?
Citing the BCC, the daily Granma says that the decision is “indispensable” given the restrictions at “unusual levels” that Cuba has had to deposit the US dollar bills it receives in international banks.
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This “as a consequence of the extraterritorial effects of the blockade and the measures adopted by the United States in the last four years and which remain in full force to this day.”
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Image source, Getty Images
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Cubans have increased the use of the dollar during the pandemic.
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In addition, since last year the Cuban government eliminated a 10% tax on the use of dollars, as part of the measures to face the pandemic, deposits increased in american coins on the island.
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The greater use of the dollar in cash on the island has also been due to the various restrictions of Washington for sending remittances from the US to the island and sanctions on intermediary companies.
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“The banking system has no choice but to temporarily suspend the acceptance of US dollar cash deposits,” Granma said.
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“The duration of this measure will depend on the elimination of the restrictions that prevent the normal functioning of the export procedures of the US currency,” he added.
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What does it mean for Cubans
Cuba is suffering a serious economic crisis and in recent months the shortage of basic products has worsened.
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Although the problems started earlier, the disappearance of tourism due to the coronavirus pandemic made things even more difficult.
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The government announced in December the disappearance of one of the two legal tender currencies in the country and other economic reforms that many experts had been demanding for years to clean up the economy, but that could lead to an increase steep in short-term prices.
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The economist Pavel Vidal, from the Javeriana University of Cali, in Colombia, told BBC Mundo that “since the recession began in 2019 and the Cuban peso began to lose value, the use of the dollar has been gaining importance, which is becoming increasingly important. greater weight in the economy “.
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The expert believes that those who will be most affected by the measure will be those who send and receive remittances in dollars, on which many Cuban families depend, who now will have to do so in other currencies, with the consequent risk of losing in the exchange rate. .
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“Actually, the government is transferring families the financial risk arising from the seizure “.
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Another likely effect is that between now and June 21, when the measure will take effect, the state will raise many dollars.
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In the current context of shortages, the stores that have more items are the so-called MLC (Free Convertible Currency) stores, owned by the State, where essential products that are very difficult to find can be bought, but payment in cash is not allowed, which is which will foreseeably lead many to deposit their dollars in the bank to be able to pay with their card before it is no longer possible.
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