“We will start selling foreign currency starting tomorrow,” announced the Cuban Minister of Economy, Alejandro Gil, during a broadcast on state television. This measure aims to “build a foreign exchange market” in the country “that allows a legal exchange of currencies”, which in turn will allow increasing the purchasing power associated with the national currency, said Alejandro Gil.
A large part of the Cuban population receives dollars -sent by family members living abroad or for services provided to tourists visiting the island- which are later exchanged more frequently on the black market, and therefore move completely outside the the official economy.
With the intention of removing the circulation of these coins from the black market, the president of the Central Bank, Marta Sabina Wilson, announced on August 4 that banks and exchange houses would now buy dollars at a rate of 120 pesos per greenback. changes at the beginning of August-, against 24 pesos of the official rate.
“A favorable result”
According to the president of the Central Bank, Marta Sabina Wilson, this measure had “a favorable result.” In twenty days, financial entities “bought ten times more foreign currency than they would have bought in a month with the exchange rate at 24 pesos,” she said. For the sale of dollars, “the exchange rate taken into account is maintained at 120 pesos,” she specified.
The US currency has skyrocketed on the black market since the implementation in Cuba, in January 2021, of an economic reform that set the dollar exchange rate at 24 pesos, and the suspension last June of the sale of dollars to the population due to lack of cash.
140 pesos for a dollar on Monday
Only Cadeca branches, the official Cuban exchange houses, will be authorized to sell dollars, and “they will only sell what they have bought,” said Marta Sabina Wilson. The sale of dollars will also be reserved for citizens, and not for small and medium-sized businesses, she said. And the acquisition will be limited to 100 dollars per person.
On Monday, the black market rate was 140 pesos to the dollar, but Alejandro Gil said he was determined to maintain the 120-peso rate for state purchases and sales. “We are going to defend the 120 exchange rate. We are going to find a way for the State, which is now participating in sales operations, to defend this exchange rate,” he said.
Cuba is currently going through its worst economic crisis in thirty years, with a growing shortage of food, medicine and fuel, due to the consequences of the coronavirus pandemic and the tightening of the US economic embargo.
Source: BFM TV
