RIO DE JANEIRO, BRAZIL – Cuba announced on Thursday the temporary suspension of bank deposits of dollars in cash as of June 21, a measure it attributed to the U.S. financial and commercial embargo and which comes in the midst of an economic crisis on the island with a strong devaluation of the local currency.
The country’s state-owned banks will only accept U.S. dollar deposits in cash until June 20, informed the Central Bank of Cuba (BCC) in a television program exclusively dedicated to announcing the new measure.
This comes at a time when the value of the dollar on the black market has grown unchecked to over 70 Cuban pesos (CUP) this week, almost triple the official exchange rate of 1 to 24.
The minister-president of the Central Bank of Cuba (BCC), Marta Sabina Wilson, assured that the measure is temporary and specified that Cuban banks would continue to accept other cash bills such as euros, pounds sterling, Canadian dollars, or Japanese yen.
She also specified that people would legally possess U.S. bills and any other foreign currency because “we are not penalizing the possession of dollars”, she added.
The BCC clarified that Cuban bank accounts in U.S. dollars (denominated with the euphemism “freely convertible currency” or MLC) are still fully operational so that withdrawals can be made, transfers from abroad can be received. Deposits in currencies other than the U.S. dollar can be made.
The central bank explained that it was forced to adopt this decision “given the obstacles imposed by the U.S. economic blockade so that the national banking system can deposit abroad the cash in U.S. dollars collected in the country”.
At the beginning of this year, Cuba implemented a process of monetary and exchange unification, which has meant the withdrawal from circulation of the convertible peso (CUC) -parity with the dollar- and which left the Cuban peso (CUP) as the only official currency in the country, with a single official conversion rate of 24 pesos per dollar.
The governing entity of Cuba’s banking system denounced that it is increasingly difficult for the island to find international banking or financial institutions willing to receive, convert, process, or process cash in U.S. currency as a result of the extraterritorial effects of the U.S. embargo.
He denounced that U.S. economic sanctions have been tightened over the past four years – during President Donald Trump’s administration – and currently remain in place.
He stressed that the suspension of cash dollar deposits is an “indispensable” decision due to the embargo limitations restricted to “unusual extremes” the possibilities of the island to deposit in international banks the U.S. bills collected in the national territory.
Absent since 2004, the dollar returned to the Cuban economy in 2019, when the sale of household appliances and car parts in MLC was announced, to be extended the following year to a large part of the food and basic products that are marketed in the state network of stores.
This has skyrocketed the dollar’s value and other denominations on the black market, as many Cubans are forced to acquire foreign currency to buy their food, toiletries, and other products that are generally impossible to acquire with Cuban pesos.