Cuba gives green light to dollar deposits in its banking system

First modification: 04/12/2023 – 04:51

Since its entry into force, on Monday, April 10, a resolution of the Central Bank of Cuba allowed Cuban financial and banking institutions to receive cash deposits of US dollars in their accounts.

This policy shift comes as the island faces its worst economic crisis in three decades, with growing shortages of food, medicine and fuel. which was reflected in annual inflation of 39% in 2022.

The limited availability of said currency has caused the formation of an illegal market, in which some Cubans seek to save dollars to emigrate outside the island.

However, for the Issuer, this measure is “advisable” given the current economic situation in Cuba, in which foreign exchange is beginning to arrive as the tourism sector, key to its economy, recovers from the impacts of the coronavirus pandemic. Covid-19.

Cuban Foreign Minister Bruno Rodríguez assured on Twitter that the determination “will benefit the economic activity of the nation and the population, despite the United States measures that hinder the financial flow out of Cuba and prevent cash deposits from the United States abroad”.

two year ban

Cuban authorities banned the flow of US dollars into the country in June 2021, arguing that a US embargo made it impossible for Cuba to move the money abroad.

This US trade embargo was implemented in the years after the Caribbean country’s revolution in 1959 under the argument of prohibiting the flow of funds to what it has called for decades a “communist regime.”

The US punishment has hampered the Cuban government’s ability to conduct transactions in dollars.

With Reuters and AP