An Issue of High-Denomination Banknotes in Cuba Will Come Out This Month, Says a Bank Source

Line to withdraw cash at the ATMs of the Metropolitan Bank of 23, between Malecón and P, in El Vedado, Havana. (14ymedio)

14ymedio bigger14ymedio, Havana, 8 September 2023 — Cuba will once again manufacture high-denomination banknotes that will circulate this month to alleviate the cash crisis that the Island suffers. The data was revealed to the official press by an official of the Banco Popular de Ahorro (BPA) of the town of Santa Fe, on the Isla de la Juventud, who also said that the ATMs will reissue bills “24 hours a day.” Interviewed by the Victoria newspaper, Ronald Molina, commercial manager of the BPA in that community, explained that the authorities were taking “a group of measures” to “stabilize the situation” of banknote shortages throughout the Island.

However, on a tour of the banks and ATMs located in the areas of El Vedado and Nuevo Vedado in Havana, 14ymedio asked several customers and workers if they were aware of the issuance of new banknotes in September. The answer was negative in all cases.

I haven’t heard anything about new banknotes, and I don’t think they would do that to us, because there wouldn’t be enough for the population

“I haven’t heard anything about new banknotes, and I don’t think they would do that to us, because there wouldn’t be enough for the population,” said one of the employees of the Metropolitan Bank, located at 23, between Malecón and P. “There are still long lines every day at the ATMs.”

The ignorance that prevails in the Havana bank branches contrasts with the confidence of Molina, who guaranteed that the new banknotes will soon be available. However, he did not specify if they will have the same format as the 100-peso notes printed this April. Although they retained the characteristics of the previous ones, they have a different paper without the reliefs or the Braille system for the blind, so their printing could have been less expensive.

However, he added that the country tries at all costs not to “resort to the printing of very high denominations,” but will continue to manufacture those that already exist, where the largest bill is the 1,000-peso one.

Although the official did not clarify the cause of this reticence, recent statements by the Central Bank of Cuba (BCC) and the Ministry of Economy and Planning indicate that it could be the difficulties presented by the State to cover the high cost of the production of the currency, since the higher the denomination of the banknote, the higher its manufacturing cost.

With the increase in electronic transactions “the currency used in the manufacture of physical currency can be allocated to other priorities

This August, in a broadcast of the Roundtable program, the president of the BCC, Joaquín Alonso, alluded to the advantages of the country’s banking and pointed out that with the increase in electronic transactions “the hard currency used in the manufacture of physical money can be used for other priorities.”

Similar comments were also made by the Minister of Economy, Alejandro Gil, last May, when he admitted in front of Parliament that printing and taking care of money was extremely expensive and that there was little capacity to meet the population’s demand for cash.

Cuban economist Pedro Monreal then explained on his X (Twitter) account that “with the ’shipwreck’ of the Cuban peso since 2021, in principle there should be a change in the denominations of the banknotes.” He recommended the printing of paper money of 2,000, 5,000 and 10,000 pesos.

“With inflation and devaluation, more banknotes are needed to buy the same product or service, or new banknotes with higher denominations,” said Monreal, who pointed to the cost of printing as a problem for an economy as precarious as the Cuban one.

Asked by Victoria about the low liquidity of ATMs and whether this situation responded to a national experiment or a “strategy” of the Government to force users to resort to electronic means of payment, Molina was elusive. He responded that, with the inclusion of the mipymes [MSMEs, or micro, small and medium-sized enterprises] in the economic panorama, the high-denomination banknotes of the Island have stopped returning to the banks.

According to the manager, these companies “manage large amounts of cash and need it to buy from other economic actors,” so they have had to hoard more money that the State has not been able to replenish. He also added that with bancarización [banking reform] this problem is alleviated for the MSMEs, which “balance” many problems of daily life, although he acknowledged that the new measure does not “improve their businesses.”

Among the habaneros interviewed by 14ymedio, many agreed that for months the banks have only operated with low-denomination banknotes that don’t usually exceed 100 pesos. This Friday, at the 23 and J branch of the Metropolitan Bank, a client complained that she had been given 3,000 pesos in 20-peso bills. The cashier, a little impatient, explained that those were the bills they had available. “And you don’t know how difficult it is to get big bills. I wish we had them so we wouldn’t have to come in on Sundays to fill in the ATMs,” the official said.

In another branch on the corner of Marino and Conill, in Nuevo Vedado this Friday, customers could only withdraw 1,000 pesos at the only ATM that worked and the same amount if they used the cashier service. The bills that were being issued were 10 pesos, and annoyance ran through the long line that began to form before dawn.

A man who deposited 15,000 pesos was a relief for the employees because “the money was already running out and at least with that we can pay more customers,” said a worker. To top it off, the ATM had a problem with the zero number key, which lengthened the entire process and canceled many operations.

Despite the fact that for months the press and the Government have been promoting bancarización as a relief from several economic problems on the Island, Cubans continue to show distrust of the transition to virtual payments and prefer to manage their assets in cash.

Translated by Regina Anavy 


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