The Cuban government starts selling dollars – with limits

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HAVANA (AP) — Dozens of Cubans lined up at currency exchanges Tuesday for the chance to buy dollars and other hard currency from the government for the first time in two years.

The new policy announced late Monday comes nearly three weeks after the communist government began buying hard currency from the public at 110.40 pesos to the dollar – a rate similar to the black market rate and more than four times the rate used for official transactions.

Under the new policy, intended to help tackle the illegal hard currency market, individuals can purchase up to $100 in cash per day at the rate of 123.60 to the dollar at 37 designated CADECA money changers by the state.

The official rate used by the industries and government 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 a central Havana exchange house. . Jam is one of many hard-to-find products in subsidized state stores.

But 32-year-old cameraman Juan Pérez was unhappy with the new measure, arguing that the limits on sales would only drive up the price of dollars on the black market.

At the start of 2021, Cuba eliminated a long-standing dual currency system, ditching a special type of convertible peso meant to be primarily for tourism and foreigners and turning all operations into local currency.

But prices rose much faster than the new, higher wages enacted as part of the reform, which coincided with an economic crisis caused by the COVID-19 pandemic and reduced support from Cuba’s ally, the Venezuela, which was also struggling, as well as continued US sanctions that had limited money sent to Cubans by relatives in the United States

Growing shortages have led to higher prices for goods purchased from private sellers and a street-level devaluation of the peso, making dollars and other hard currencies sent or imported from abroad more valuable. This led to long queues and growing public frustration.

The low, fixed official rate meant that people avoided exchanging money through the government, further depriving it of hard currency and its ability to import needed commodities.

Cubans can use special hard-currency debit cards to buy goods from specialized state-owned stores and many also seek dollars or euros to travel abroad, sometimes buying goods to resell for a profit when they they go back to their place.

Officials said Monday that under the new policy, sales of hard currency would be limited not only by the $100 cap, but also by the amount the local exchange house had bought from the public the previous day.

At the branch visited by The Associated Press, CADECA regional director Kenia Katiuska Mesa told gathered customers that 190 people would be allowed to shop there on Tuesday.

Economist Mauricio de Miranda said on his Facebook page that the new measures are « insufficient and partial and instead of leading to a solution of economic problems, aggravate the serious crisis which has now lasted for more than three decades ».

Cuba specialist at the Javeriana University in Cali, Colombia, he said that without « a program of structural, integral and systematic reforms, they will not be able to overcome the current internal obstacles that hinder Cuba’s economic development ».

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Andrea Rodríguez is on Twitter: como: www.twitter.com/ARodriguezAP

Andrea Rodriguez, Associated Press

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