These are two of the questions that Cubans on the island ask themselves the most, after the Central Bank of Cuba announced this Monday that the US dollar (USD) would be readmitted into the national banking and financial system.
As we may remember, direct deposits in dollars had previously been disallowed in accounts in Freely Convertible Currency (MLC) in which only international currency transfers or deposits in currencies other than the US bill were allowed.
The recent decision of the Central Bank of Cuba overturned the previous refusal, but as usually happens, the press release released this Monday by the state media leaves more questions than answers. Many take it for granted that at least one Round Table will be needed to explain in depth what changes from now on.
Meanwhile, others question the decision, and indicate that they should start by honoring the bank certificates of those who had accounts with deposits in Cuban Convertible Pesos (CUC).
Let us remember that when the so-called “Ordering Task” began, the CUC was eliminated and many Cubans who had accounts in that currency were given the possibility of exchanging it in Cuban Pesos. But others chose to receive a certificate of deposit and wait to obtain dollars “when the country’s conditions allow it.”
However, these clients are still waiting for the right moment, while the banking authorities assure that right now only this step can be taken.
Can it be deposited in US dollar bank accounts? Will it be allowed to withdraw the dollars from those accounts in USD?
According to the information published by the Central Bank of Cuba (BCC) it is not clear, although initially it seems so. At least according to what was explained in the brief press release:
“From this moment on, financial and banking institutions will accept US dollar cash deposits in bank accountsand the acceptance of this currency in the operations of purchase and sale of currencies in the Foreign Exchange Market will be maintained as it has been up to the present.”published the BCC.
As we can see, they talk aboutbank accounts” to dry, without establishing distinction. In other words, at no time is it made clear that deposits in USD will be accepted only for bank accounts in Freely Convertible Currency.
It was also indicated that the country already has the conditions for “make deposits in US dollars in financial and banking institutions, such as receive that currency in cash from swap operations”. Nor is it clear who would receive the USD in these swap operations.
vague explanations
As has happened on previous occasions, the language and explanations could not be more vague. The Central Bank of Cuba has tried to clarify the doubts of some users in this regard:
“When making a deposit of US dollars in cash in an account that is denominated in the same currency (USD), no exchange operation is carried out, so the commercial margin for exchange operations does not apply”, however, the answers continue being imprecise and sometimes it seems that even interpreters are needed:
For his part, the Cuban Minister of Economy, Alejandro Gil, has celebrated the measure saying that the country is marching in “the right direction”. The owner speaks from his Twitter profile on time of deposits that would go to the accounts in MLC. He does not mention other types of bank accounts in foreign currencies.
The bankarization of the USD supports the gradual recovery of the economy. It was already accepted in the exchange market since August 2022; Now you can bank and put on MLC cards, which could be done with other currencies and not with the USD. Are we heading in the right direction.@MEP_CUBA
– Alejandro Gil Fernández (@AlejandroGilF) April 11, 2023
According to the analysis of the economist Pedro Monreal “the USD were already bankable. What is new is the physical USD to try to increase remittances, something in which the previous banking mechanism and the rickety state exchange market failed. Underpinning Dual Currency (MLC) not the right addressaccording to the official ‘model’ itself”, points out Monreal.
USD was already banked. What is new is the physical USD to try to increase remittances, something in which the previous banking mechanism and the rickety state exchange market failed. Propping up the dual currency (MLC) is not the right direction, according to the official “model” itself pic.twitter.com/RV5v3TiUTG
— Pedro Monreal (@pmmonreal) April 11, 2023
Apparently, the only novelty is that direct deposits of US dollars into bank accounts in Freely Convertible Currency will be allowed. In this case, the exchange rate would be 1 for 1, as the Central Bank of Cuba has subscribed to in some responses:
