Cuba will start selling dollars to its citizens

The Cuban government will start selling dollars to its citizens starting today, twenty days after it began buying them at the black market price, with the aim of creating an official foreign exchange market in the country.

“We will start selling foreign currency from tomorrow,” Finance Minister Alejandro Gil said on state television yesterday.

This measure aims to “create a foreign exchange market” in the country “which will allow the legal exchange of currencies”, which in turn will increase purchasing power, he explained.

A significant portion of the Cuban people receive dollars — sent by relatives living abroad or for services offered to tourists visiting the island — which must then be converted into pesos on the black market without going through the formal economy.

Aiming to wean dollars off the black market, central bank president Maria Sabina Wilson had announced on August 4 that banks and currency exchanges would now buy dollars at the black market rate of 120 pesos per dollar, and not based on the official exchange rate of 24 pesos.

The black market value of the U.S. currency has skyrocketed in Cuba since January 2021, when authorities adopted an economic reform that pegged the dollar at 24 pesos and after suspending the sale of dollars to citizens in June due to a lack of cash .

Only individuals will be able to buy dollars, exclusively from government exchanges, transactions will be limited to $100 per person and subject to availability, Wilson explained.

Cuba is currently going through its worst economic crisis in 30 years, with increasing shortages of food, medicine and fuel due to the covid-19 pandemic and the strengthening of the US economic embargo on the country.

SOURCE: AMPE