Cuban government starts selling dollars

FILE - A worker shows a wad of Cuban pesos in Havana, Cuba, Dec. 11, 2020. The government announced on Aug. 1, 2022 that it will start buying U.S. dollars at an exchange rate five times higher than the official rate, at 110 Cuban pesos per dollar after commission, in an attempt to capture more foreign currency and at the same time combat the informal market. (AP Photo/Ramon Espinosa, File) (ASSOCIATED PRESS)

 Cubans lined up by the dozens at exchange houses on Tuesday for the chance to buy dollars and other hard currency from the government for the first time in two years.

(AP).- The new policy announced on Monday, August 22nd, comes almost three weeks after the communist government began buying hard currency from the public at 110.40 pesos per dollar — a rate similar to that of the black market and more than four times the rate used for official transactions.

Under the new policy, meant to help combat the illegal market in hard currency, individuals can buy up to $100 in cash a day at a rate of 123.60 to the dollar in 37 designated state CADECA exchange shops.

The official rate used by government industries and agencies that dominate the economy remains 24 pesos to the dollar.

“I want (euros) to be able to buy snacks for my grandchildren,” said Maricela Prado, a 62-year-old state worker who was among the first in line at an exchange house in central Havana. Jam is one of the myriad products hard to find at subsidized state stores.

But 32-year-old camera operator Juan Pérez was dissatisfied with the new measure, arguing the limits on sales would just increase the price of dollars on the black market.

At the start of 2021, Cuba eliminated a longstanding dual currency system, dropping a special type of convertible peso supposedly aimed largely at tourism and foreigners and changing all operations into local currency.

But prices rose much faster than the new higher wages adopted under the reform, which coincided with an economic crisis caused by the COVID-19 pandemic and reduced support from Cuba’s ally Venezuela, which was also struggling, as well as continuing U.S. sanctions that had limited money sent to Cubans by relatives in the U.S.

Growing shortages led to increasing prices for goods bought from private sellers and to a street-level devaluation of the peso, making dollars and other hard currency sent or brought in from abroad more valuable. That led to long lines and growing public frustration.

TYT Newsroom



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