Cubans Unable to Withdraw Money from Accounts with Foreign Currency

Every day, banks start with long lines of clients interested in opening accounts with the newly legalized magnetic cards to receive deposits in dollars, euros and other foreign currencies. (14ymedio)

14ymedio bigger14ymedio, Zunilda Mata, Havana, November 5th, 2019 — Bank accounts freezing has been implemented in Cuba and not many knew about it. Marta Karla just learned it the hard way when she tried to withdraw $500 US she deposited in her account six months ago, which she was required to do to qualify for a Panama visa at that country’s consulate in Havana.

The resident of Havana, age 38, now must wait three weeks to recover her own money, deposited in Fincimex, the financial branch of the Cuban military conglomerate Cimex.

Hundreds of Cubans are in a similar situation; in the past few days they have tried to withdraw dollars from their bank accounts and they have been met with elusive excuses. “I am being told they have put my name down in a waiting list and they will let me know when they have the money,” said Maria Karla.

At the Fincimex office located on 3rd Avenue and 6th Street, in the Playa municipality in Havana, an employee confirmed this situation to 14ymedio. “All withdrawals from accounts in foreign currency are delayed because right now we do not have the cash,” she explains. “We have to wait until we are back to having a cash flow in the given foreign currency, then we can start giving the money back to each client that makes the withdrawal request.”

In the middle of the cash flow crisis Cuba is going through, authorities have kicked off a new chain of stores. It is the State’s attempt to pocket the dollars that the “mules” are taking out of the island to acquire merchandise in foreign countries. That outflow of hard currency is also aggravated by the purchases of foreign currency being made by Cubans seeking to emigrate.

In the waiting line at the Fincimex office, José Raúl Pacheco is waiting to withdraw his money and close his bank account, but holds little hope that he’ll go back home that day with his dollars in his pocket. “They told me I have to wait, but I need my money now. A bank’s role is to safe keep our money until we need it, not until whenever they want to return it to me.”

Fincimex is a financial entity that works as an intermediary for the remittances sent to the island, and issues magnetic debit cards that, unlike those cards issued by the state-controlled banks (Popular, Bandec, Metropolitano), can be used in economic transactions anywhere in the world and to make online purchases.

Fincimex deposit accounts are often used by Cubans seeking to emigrate out of the island, as an evidence of their financial self-sufficiency, a common consular requirement prior to issuing a visa, mostly to Panama, Mexico, Colombia and other countries in the region.

After the Cuban government’s announcement last October that the dollar and other foreign currencies will be allowed to legally circulate again on the island, the value of the dollar has increased significantly in the black market, and the value of the “convertible peso” (CUC) has tanked, and there is also an increased demand for the commonly called “verdes” or “fulas” [American dollars].

Within the black market, where “private” or “individual” transactions take place, the dollar value just rose to $1.18 CUC, well above the official exchange rate of $0.95 at the beginning of 2019. This hike has motivated many people like Pacheco to withdraw their dollars from the bank to resell them in the black market. A young man who is set to emigrate to Puerto Rico and wants to bring some money with him is his first client.

“I have saved $900 dollars from a car I sold last year, and part of the payment was in hard currency,” he adds. “I wanted to keep it in the bank because I do not have safe conditions to keep that kind of money in my house, and because at Fincimex I was given a magnetic (debit) card.”

Now Pacheco has learned the hard way that blue card he was issued back then is good for nothing; it cannot be used for purchases in the new hard currency stores being opened all over the island. “To do that, I was told I need to open an account in another bank, or a different account with Fincimex and wait for them to issue me a green card.”

These hurdles pushed Pacheco to make the decision to withdraw all his dollars from Fincimex and resell them to make some additional profit. Although in the official exchange offices (Cadeca) the prices have not changed ($0.87 dollars for $1 CUC) because it is the State-controlled exchange market, those offices do not sell dollars, they only buy them back for the government.

“I have been in several banks in three different municipalities to buy dollars because I have t0 travel this week, to no avail,” explains a woman outside the Metropolitan Bank office on 23rd Ave and J Street in Vedado. “Here the employee told me they only have $30 dollars in the register and I need $70, so I will have to wait and see if they get more (cash) in throughout the day,” she complains.

Since the opening of the new stores operating only in hard currency was announced, more than three weeks ago, every day the banks wake up to long lines of clients waiting to sign up for the new magnetic (debit) card to use with their accounts in dollars, euros and eight other foreign currencies. “I am going to stay out here but I will have to get back in the line later on, to ask again if they have enough dollars to sell me.”

The woman adds that, even though the liquidity of foreign currencies in the banks has decreased in the last few months, “it was already a problem that have been affecting clients for over a year.”

In 2018 she had to “rent” $1000 dollars to use them as financial statement requirement for her older son to apply for a visa, and after he showed the statement in an European consulate, she had to return the money, paying a small fee for the temporary loan of the dollar bills.

The increased demand for the dollar is not only prompted by the opening of the new stores; it is also fueled by the fear of a sudden monetary exchange that would merge both currencies now circulating in the nation: the CUP and the CUC. Hoarding the “verdes” has become the safest alternative for Cubans planning to travel abroad, to open a small business or simply because they want to safeguard their life’s savings.

The decreased in tourism from the United States has also contributed to the scarcity of “the enemy’s currency“, as ironically, dollars are called in the Cuban streets. After the diplomatic rapprochement between Washington and Havana, lots of small private businesses located in high traffic tourist areas started accepting this currency as form of payment.

“The dollar is under a search and rescue (operation),” jokes a young Cuban American outside a Metropolitan Bank office in Linea this past Monday. “Last year when I came to visit my family, nobody wanted to accept my payments with American dollars because they’d lose money at the exchange and today everybody is asking me if I brought fulas.”

Translated by: Mailyn Salabarria Cappuccio


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