Cuba’s Efforts

Cuba declared that government will start buying dollars and other changeable currencies on Thursday at a price that is approximately 5 times the going rate in an attempt to beat the black market and seize the assets. As according to internet-based online news source El Toque tracker, the most witnessed in the communist dictatorship, Central Bank Chairman Marta Wilson Gonzalez stated on government mainstream tv on Wednesday night that the government financial system had established a new rate of 120 pesos to the dollar, especially in comparison to the authoritative fixed rate of about 20 pesos, and 115 pesos on the grey economy.

grey economy

The very first step

Gonzalez said that most operations in the state-dominated sector would continue to function at the fixed interest rate that had been in place for some more than two years and that the new price would fluctuate and not pertain to them. Cuba decided to ban dollar in 2020 due to U.S. sanctions, and shortly after, it stopped issuing the general populace changeable money for pesos, claiming it was out of money.

Alejandro Gil, the finance minister, stated in an interview with the head of the central bank on Wednesday that he wanted to restart exchange rates soon, but that the initial step was to take control of the black market.

He claimed that a significant amount of international money approaching the nation today escapes the national banking program’s grasp. The relatively close, resource industry increased 1.3% last year following contracting 10.9% in 2020, slammed by tough new U.S. sanctions, the epidemic, and present rising global pricing for products and transportation. Gil stated that the rebound was continuing, albeit slowly, without providing numbers.

Rising protests due to the shortages

In the past few months, there have been a few isolated demonstrations due to a lack of food, healthcare, gasoline, and now power. The indicator, according to Pavel Vidal, a professor at Pontificia Universidad Javeriana Cali in Colombia and an erstwhile economics professor for the Central Bank of Cuba, discussed a major grievance of visitors who swapped cash at the fixed government rate in resorts only to find that outside the road it’s all pinned down at the unofficial rate.

The private sector, that frequently gets foreign cash from tourists, and the institutions will now again receive and convert actual dollars at 120, according to Vidal, unlocks a significant primary hurdle that transfers faced when they were costing 24 pesos.

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