Cuba will no longer accept Dollar deposits in Cash

Cuba will no longer accept Dollar deposits in Cash

Cuban banks will no longer accept dollar deposits in cash as of June 21, a measure that authorities deem necessary due to the impact of US sanctions on the Caribbean nation, authorities announced Thursday.

The provision will be temporary, informed the Central Bank of Cuba (BCC) in an official note.

“Given the obstacles imposed by the economic blockade of the United States so that the national banking system can deposit the cash in United States dollars that is collected in the country abroad, the decision has been adopted to temporarily stop the acceptance of the banknotes of that country. currency in the Cuban banking and financial system ”, explained the BCC.

Cuban banks are the only ones authorized to operate with the population on the island.

In an appearance on Cuban television, government officials indicated that natural and legal persons will not be able to place greenbacks in their accounts, even if their denomination is in dollars.

The possession of the dollar is not penalized, but these accounts in said currency will be fed by electronic transfers from abroad. In case people carry cash, it should be in another currency —for example euros— and the state banks in Cuba will make the conversion at the official rate.

The president of the BCC, Marta Wilson, stated that Cuba has an “accumulation of dollars in cash” without “value”, since they are not allowed to deposit them in international banks to make payments, for which it is necessary to suspend the acceptance of more banknotes of that coin.

“The entities (abroad) refuse to do operations with Cuban banks,” said Wilson. “The (Central) Bank cannot deposit in its accounts abroad.”

The United States toughened its policy towards Cuba during the government of former President Donald Trump in order to pressure for a change in the island’s political model, and new President Joe Biden has not modified those sanctions.

In the last four years, Washington applied 240 measures against Cuba, including the suspension of cruises, restrictions on travel and remittances, placing the island on a list of terrorist countries and the persecution of banks from third countries that dare to operate with Cuba, imposing heavy fines on them.

“One can say with justification that the measures adopted from 2019 to here have had a surgical precision trying to affect the fundamental sources of income of our country,” said during the television appearance the director of the United States Department of the Foreign Ministry, Carlos Fernández de Cossío.

Therefore, the Central’s disposition is “an unavoidable, indispensable measure that our banking system has to take,” added the diplomat.

The BCC measure will have an impact on the population that uses the dollar to buy food in the stores that the government opened exclusively in that currency, and that are relatively supplied in relation to those of Cuban pesos, in which many products are scarce, especially food and toilet.

As these businesses only accept plastic cards for local use, the Cubans opened accounts in local banks, obtained the dollars and deposited them there to be able to buy, an operation that has now been restricted.

Wilson reiterated that until June 21, banks will accept dollars to feed those cardholder accounts, for which he urged the population to deposit said currency in order to use it to pay in stores.

The Cuban peso is at 24 per dollar at the official rate, but the State and the banks publicly recognized that they do not have to sell at that price to people, so the population gets greenbacks on the black market at 60 per dollar. .

The gap between legal and street exchange has skyrocketed in recent weeks, especially since the government refused to sell amounts of $ 300 to travelers at the airport’s Casa de Cambio – the only one that did. – last month, arguing that they had no cash of that currency to offer. That argument runs contrary to the one now offered by officials, who argue that there is an excessive accumulation of cash.

Melissa Galbraith
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.