Tuesday, July 14, 2026
News and Views from the Global South
ECONOMY-CUBA: To Sell or Not to Sell
Dalia Acosta
- Cubans today are deciding whether to sell, exchange, buy, deposit in the bank or continue hiding their dollars under the mattress – the list of options they have been mulling over since an imminent ban on the use of dollars was officially announced.
Evelio Jiménez, a 68-year-old accountant, told IPS that he actually wrote out his own list and, three days later, was still unsure what to do with the little over 200 U.S. dollars he keeps for emergencies.
“Exchange it all for Cuban convertible pesos, exchange part of it and keep the rest in U.S. dollars in the bank, open a bank account, spend everything in the shops,” listed Jiménez, unable to make a decision.
The new ban poses a dilemma, although perhaps not as complex as Hamlet’s “to be or not to be”, more than 10 years after the U.S. dollar was accepted as legal tender on the island.
“This has never been seen before: people are exchanging all or a good part of their U.S. dollars for Cuban non-convertible pesos,” said the accountant.
The U.S. dollar currently sells for 27 Cuban pesos and is bought for 26. Simultaneously, the Cuban convertible peso is in circulation, a currency created as a substitute for the greenback on the internal market, at an exchange rate of one to one.
Since 1993, Cubans have needed dollars to obtain a range of goods and services. But as of Nov. 8, Cubans and visitors will no longer be able to use dollars in this Caribbean island nation, and will have to exchange them for convertible pesos, paying a 10 percent commission on each exchange transaction.
Until then, Cubans can exchange their dollars without paying a commission and can also open bank accounts from which they can later draw cash in convertible pesos or dollars, without losing any money.
The measure was announced by President Fidel Castro on Oct. 25, in response to recent moves by the U.S. administration of George W. Bush directed at hampering Cuba’s access to dollars.
The economic sanctions against Cuba put in place by the United States more than 40 years ago ban the country from using the U.S. dollar in commercial transactions.
Daniel W. Fisk, deputy assistant Secretary of State for Western Hemisphere Affairs in the U.S. State Department, announced this month the creation of a so-called Cuban Asset Targeting Group aimed at blocking foreign exchange flows towards the island.
An estimated one billion U.S. dollars a year in expatriate remittances are sent to Cuba from family members abroad. Most of that comes from the Cuban community of 1.3 million people in the United States.
The total number of U.S. dollars in the hands of the Cuban population of 11.2 million when the measure was announced last week was estimated by economists consulted by IPS at around 600 to 800 million.
Although the queues at the exchange bureaux and banks are still not as long as had been expected, official sources confirm that deposits and sales of U.S. dollars by Cubans have ballooned.
“The amount of dollars deposited in existing bank accounts and new ones opened during the last three days equals the total deposits of the past four years,” stated a report published by the official daily Granma on Oct. 29.
The newspaper added that the daily average of net sales of U.S. dollars in the government exchange bureaux (“casas de cambio” or CADECA) had multiplied between Oct. 25 and Oct. 28 by a factor of 72 compared with the past ten months.
The report did not provide figures regarding the one-to-one exchange of dollars for convertible pesos, but noted that a number of exchange bureaux were forced to close early because they had run out of cash.
“I traded everything I had for euros. I don’t know if it was a good thing to do, but I feel safer,” said Mariana Ramos, who stood for three hours in line in a Havana bank and saw people open accounts with initial deposits of up to 40,000 U.S. dollars.
As an immediate effect of the new measure, experts predict a significant increase in foreign exchange in the state’s reserves, which could later shrink, depending on the impact of the ban on dollars on the inflow of expatriate remittances and tourism revenues.
Tourism Ministry figures indicate that 75 percent of foreign visitors (those coming from European countries and Canada) will be able to exchange Canadian dollars, euros, pounds sterling or Swiss francs without having to pay any commission.
But Cuban tourism could become less competitive in the Caribbean, with respect to drawing visitors from Latin American countries like Mexico, Chile, Argentina and Brazil.
A study to which IPS had access predicts a decrease in the availability of U.S. dollars, which would be accentuated by the possible withdrawal of foreign companies doing business on the island.
It is likely that a majority of remittances will continue to be sent to Cuba in dollars, and the state will thus benefit from the 10 percent commission, which will become a sort of “tax on the possession” of that currency.
Cubans depend on transfers of money from abroad to have access to goods that are only sold in the government chain of stores that do not accept pesos. That includes certain foodstuffs, perfume, clothing, footwear, cleaning products, household utensils and home appliances.
The Cuban peso is used for paying for basic services, buying food products that are purchased with a special ration card, fresh produce sold at the free farmers markets, and locally-produced goods, often of lesser quality, sold in the stores that accept pesos.
A statement by the Assembly to Promote Civil Society, a dissident group, complained about the new measure, saying it would have a major impact on the Cuban people, both within and outside of Cuba.
The “unfair 10 percent discount” will hurt people in “the poorest strata of the population,” stated the communiqué.
John Kavulich, head of the New York-based U.S.-Cuba Trade and Economic Council, predicted a short-term drop in transfers from the United States. But, he added, they will rally before the year-end holidays.
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