On April 10, the Extraordinary Official Gazette No. 26 dated April 6, 2023, was published, repealing Resolution 176 of June 2021, which suspended the collection of the tax of US dollar cash by banks and non-bank financial institutions for banking penetration purposes.
This measure corresponds to the country’s situation and its main economic needs. The resumption of tourism by foreign and Cuban visitors, the recovery of services and productive activity are key factors that made this resumption possible, according to the authorities.
Since the establishment of the current exchange market, since August of last year, the conditions for the reopening of the possibility of making cash deposits in USD by financial and banking entities, as well as the possibility of receiving this currency in exchange operations, have been consolidating
The Underlying Problem in the Reactivation of Dollar Deposits
The repealed measure was applied since 2021 due to difficulties in the use of the dollar in the international banking system due to the U.S. embargo against the island. The policy of economic pressure that justified the measure in June 2021 remains in force.
This conditions that the banking activity with the currency must be monitored to observe if its implementation yields the expected results and is reverted in improving the quality of life of the people and the economic conditions of the country, which is immersed in a deep crisis. According to the BCC, they will be prepared to make any necessary adjustments.
Economic Background of the Dollar Deposit Reactivation Measure
After the monetary reunification of 2021, through the so-called “monetary reorganization”, the CUC was withdrawn from circulation and the Cuban peso was consolidated as the only official currency of the country.
During this period, the Freely Convertible Currency came into action, which is only available virtually and whose price makes it comparable to the dollar. At present, the official exchange rate of the USD is 1×120 CUP. In the informal market, its price varies according to demand, which after the new parole has begun to rise again and is currently between 180 and 185 Cuban pesos. It should also be noted that the flow of foreign currency has increased considerably after the reactivation of remittances through the Western Union service and the reactivation of certain consular services of the North American country in Havana.
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