Cuba reauthorizes dollar deposits in its banking system

The Central Bank of Cuba announced on Monday that it would once more authorize deposits of US dollars in cash, suspended in 2021 amid an embargo imposed by the United States.

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From now on, “financial and banking institutions will accept cash deposits of US dollars in bank accounts,” says a resolution of the Central Bank of Cuba (BCC) published Monday in the Official Gazette.

This new rule thus cancels the decision of the Central Bank of Cuba which had suspended in June 2021 the deposits of dollars in cash, due to difficulties linked to the persistent American embargo.

She then explained that the Cuban banking system was having more and more difficulty in proceeding with international banks to deposits in dollars recovered on the national territory because of the embargo, in force since 1962.

Published to everyone’s surprise, this resolution specifies that the new monetary policy responds to the current priorities of the island: the economy and tourism, tested by the pandemic, which are gradually picking up.

The BCC also justified its decision by this favorable economic context, adding that the measures aimed at “preventing deposits of US dollars in cash abroad” remained in force.

For the Cuban economist Omar Everleny Pérez, the authorities are trying to repair their mistakes, he analyzes, stressing that “the dollars continued to circulate on the black market”.

“The fundamental problem has not been resolved”, judge for its part the BCC.

Since 1962, the island has suffered an embargo which has made it difficult to trade in dollars, further reinforced during Donald Trump’s presidency with more than 240 new measures, left intact for the moment by current President Joe Biden.

In addition, the monetary reform implemented by the Cuban government in January 2021, in the midst of a pandemic, caused a devaluation of the Cuban peso which saw the price of the dollar drop from 24 pesos to 120 pesos at the official rate, and flamed on the black market, where it now trades at 185 pesos.

This depreciation has been accompanied by runaway inflation, reaching 70% in 2021 and 39% in 2022.

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