Cuba’s Central Bank Denies That it is Selling US Dollars

The depreciation of the dollar is linked, according to some experts, among other issues, to the announcement made by the Cuban Minister of Economy. (14ymedio)

14ymedio biggerEFE/14ymedio, Havana, 31 May 2022 — The Central Bank of Cuba (BCC) denied on Tuesday that it is selling, to individuals, U.S. dollars and freely convertible currency (MLC, the Cuban virtual currency backed by hard currencies). According to the official newspaper Granma, the monetary authority has thus responded to rumors that have arisen after an announcement by the Cuban Government that it would sell dollars to economic actors under certain conditions, a measure that has not yet been applied.

The BCC assured that this is “fake news” that is circulating “on social networks and digital media.” “Don’t be fooled, follow our official channels,” the BCC wrote on Twitter.

The newspaper criticized that “it is the second time this year that an attempt has been made to manipulate the issue.”

It argued that there are those who take advantage of the impact of inflation derived from the scarcity caused by the pandemic and the tightening of U.S. economic sanctions on Cuba.

The country temporarily suspended bank deposits of dollars in cash in June 2021 due to “obstacles” from the U.S. embargo, although banks continued to accept other cash currencies such as euros, pounds sterling, Canadian dollars and Japanese yen.

In mid-May, the Cuban government announced that it would sell MLC to some state and private economic actors, without specifying the conditions.

The Cuban Minister of Economy and Planning, Alejandro Gil, said that this sale would be “gradual and selective,” at a rate higher than the official rate (24 Cuban pesos, CUP) but without exceeding the informal rate (currently around 100 CUP).

For the first time since January, the dollar traded this week below 100 CUP in the informal market, a depreciation that some experts link, among other issues, to this announcement by the Cuban Government.

This exchange rate is the calculation made daily by the independent media El Toque, which weighs the figures of hundreds of ads for the sale of foreign currency on several websites in the country, and which many experts take as a reference value. For their part, the euro and the MLC maintained values of 110 and 106, respectively.

Alejandro Gil’s statements immediately aroused criticism from experts, such as the economist, Pedro Monreal, who called it “one more nail in the coffin of the ’Order’ and a possible source of illegalities.” In any case, the collapse of the MLC, since last week, seems to be a direct consequence of those statements.

Another factor that has influenced the fall in currencies is the new measures announced by the U.S. government of Joe Biden last week, on May 16, among which is the elimination of the remittances limit of $1,000 per quarter and per person.

This restriction had been in force since 2019, when it was promulgated by then-U.S. President Donald Trump along with other provisions that largely paralyzed the official business of foreign exchange, such as the prohibition of doing business in which the Cuban military was involved. This was the case of Fincimex, blacklisted by the U.S. Treasury in June 2020, which managed remittances up to that time.

Translated by Regina Anavy


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