Cuba suspends cash dollar deposits on the island

The Central Bank of Cuba (BCC) “temporarily” suspended cash deposits in dollars on the island, a measure that applies to both Cubans and foreigners, the state newspaper Granma reported on Thursday.

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.

The decision, said the BCC, comes “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 are collected in the country, ”Granma reported.

“It is a measure to protect the Cuban financial system, which applies only to the currency of the United States in cash. Not to the existing accounts in that currency ”, the publication underlined.

Deposits in other foreign currencies will not be affected. Electronic transfers in dollars are also not prevented.

The BCC did not indicate the date on which the restriction will be lifted.

Why the restriction?

Citing the BBC, the Granma newspaper 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.

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”.

Cubans have increased the use of the dollar during the pandemic, according to Cuban authorities.

In addition, since last year the Cuban government eliminated a 10% tax on dollar deposits, as part of the measures to face the pandemic, deposits in US currencies increased on the island.

The greater use of the dollar in cash on the island has also been due to the various restrictions of Washington for the sending of remittances from the US to the island and sanctions against intermediary companies.

“The banking system has no choice but to temporarily suspend the acceptance of US dollar cash deposits,” Granma said.

“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.