HAVANA: The Cuban government, in a reversal of a ban enacted in 2021, has given the green light to US dollar deposits into the local banking system as the Caribbean island nation undergoes an economic crisis.
“From this moment on, financial and banking institutions will accept cash deposits of US dollars into bank accounts,” Cuba’s central bank said in a resolution published late Monday in the official gazette.
The central bank said the step was “advisable” given Cuba’s current economic situation, which is seeing foreign currency begin to trickle in as the tourist sector recovers from the impacts of the COVID-19 pandemic.
The measure “will benefit the nation’s economic activity and the population, despite US measures that hinder the financial flow out of Cuba and prevent US cash deposits abroad,” Cuban Foreign Minister Bruno Rodriguez said on Twitter on Tuesday.
Cuban authorities banned the flow of US dollars into the country in June 2021, arguing an embargo from the United States made it impossible for Cuba to move the money abroad.
The US trade embargo on Cuba was put in place in the years after the country’s 1959 revolution under the argument of prohibiting the flow of funds to what it has dubbed a Communist regime.
Cuba has repeatedly denounced the US embargo, with the United Nations General Assembly recently voting overwhelmingly to end it. The non-binding resolution was opposed only by the US and Israel.
The move by the Cuban government comes after annual inflation hit 39 percent in 2022, and shortages of foreign currency, medicine, fuel and food have exacerbated.
The limited availability of dollars has caused a de facto black market to form, with some Cubans looking to save up enough greenbacks to emigrate off the island.
A record 220,000 Cubans were registered at the US-Mexico border in fiscal year 2022, according to US immigration data.
“This is a good measure to begin to clean up the Cuban economy,” economist Omar Everleny said. “Dollars have still been circulating on the black market, and they never reach the Cuban state.”
