World

Cuba starts selling dollars

The Cuban government is starting today to sell dollars to the population – twenty days after it started buying US currency at the black market rate, France Press reported. The measure aims to create a currency exchange market in the country, which will allow legal currency exchange, and this, in turn, will increase the purchasing power associated with the national currency, Economy Minister Alejandro Hill told state television.

Much of the Cuban population receives dollars sent from relatives abroad or received from services provided to tourists on the island. Subsequently, people exchange them most often on the black market, so they remain outside the official economy.

With the intention of removing the circulation of this currency from the black market, Central Bank President Marta Sabina Wilson Gonzalez announced on August 4 that banks and bureaux de change will now buy dollars at a rate of 120 pesos to one dollar – the same as the black market in August.

The US currency rose sharply on the black market after Cuba implemented an economic reform in January 2021 that pegged the dollar at 24 pesos. In June, the sale of dollars to the population was suspended due to a lack of liquidity.

Marta Sabina Wilson noted that the measure had a favorable result. In twenty days, financial institutions bought ten times more currency than they would have bought at an exchange rate of 24 pesos, she said.

For the sale of dollars, the exchange rate remains at 120 pesos, the central banker said.

“Only the branches of Cadeca, the official Cuban exchange bureaus, will be allowed to sell dollars, and they will only sell what they have bought,” added Wilson. The sale of dollars will only be to citizens, not to small and medium-sized businesses. , and the purchase will be limited to $100 per person, she specified.

Yesterday, the black market rate in Cuba reached 140 pesos to the dollar, but Alejandro Hill assured that the exchange rate for buying and selling by the state will remain at 120 pesos.

Cuba is currently experiencing its worst economic crisis in thirty years, with increasing shortages of food, medicine and fuel due to the effects of the coronavirus pandemic and the tightening of the United States economic embargo.

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