Cuban Elis Dania Lopez, 44, receives $ 100 a month from her father in the United States, which she uses to buy food, but next week banks will no longer accept greenback cash deposits .
Last week, Cuba’s central bank announced a suspension of dollar deposits due to what it called the lingering hardship caused by the US embargo on the communist island nation.
The measure only applies to US dollars, which means hardened Cubans will be forced to buy other currencies such as the euro. Analysts say it will hit them in the pocket.
This is a huge problem for Cubans in a country where remittances – mostly from the United States – are the country’s second largest source of income, after the export of medical personnel.
Remittances add up to three billion dollars a year, according to academics calculations.
Since Western Union closed its branches on the island last November, due to US sanctions, most of the money sent to Cuba – usually small sums – is brought in in cash by travelers from the United States. .
“It’s a bad decision,” Lopez said of the new measure, adding that the “best products” are only available in stores that accept dollars.
Other stores don’t even accept cash, which means shoppers need a prepaid card that can be reloaded by wire transfer in foreign currency.
Cubans did this mainly in dollars, so to top up these cards they will now need other currencies.
“For residents, this is a new restriction that impacts their standard of living,” economist Omar Everleny Perez, from the Christian Center for Reflection and Dialogue, told AFP.
He said it would cost people more to send money to Cuba because they would first have to convert their dollars into something else.
– Chest too full to close –
The Central Bank says it is increasingly difficult to deposit dollars in international banks due to the US embargo first imposed in 1962.
Things got worse in early 2021 when Donald Trump’s administration put Cuba back on the U.S. list of sponsor states for terrorism.
# photo1 ″ The (central bank) safe could hardly close because of the amount of dollars, ”Perez said.
“The Cuban state cannot leave with suitcases full of dollars to drop them off in Europe because no European bank will accept them,” Perez said. Indeed, these banks want to avoid Cuba for fear of being blacklisted themselves.
Independent Maykel Benitez, 42, waits with her family outside a store that sells cleaning products but only accepts foreign currency.
With a sigh of resignation, Benitez declared that he “is content with what is available”.
Like many Cubans who have no relatives abroad, Benitez bought dollars on the black market, but had to pay up to 70 Cuban pesos when the official exchange rate is 24.
From now on, “I will say (to the exchanger) not to give me dollars but euros, Canadian dollars, pounds sterling, or any other currency,” he said with a shrug.
The move could lead to “euroisation, instead of dollarization” of the Cuban economy outside state-controlled markets, said Pavel Vidal, Cuban economist at Javeriana University in Cali, Colombia, in. El Toque website.
The euro remains scarce on the island as it is usually brought by tourists and they have mostly been absent since the coronavirus pandemic hit.
It will take “some time for the euro to replace (the dollar) in the national economy,” Perez said, adding that it would prove more expensive for Cubans.
© 2021 AFP