Cuba: Minister of Economy announces opening of foreign exchange market

foreign exchange market in Cuba

Cuba’s Minister of Economy, Alejandro Gil Fernandez, announced before Parliament that the government has decided to open an exchange market for the purchase and sale of foreign currency that will operate in cash.

Gil said that this is a market that will include operations of all currencies, including the dollar (despite the fact that Cuba is economically sanctioned by the US and has difficulties to operate with that currency).

The minister acknowledged that there is already an informal market and exchange rate on the island.

The intention is to be able to increase the supply in Cuban pesos to gradually increase the purchasing capacity of the national currency, the minister assured.

“Many people would be willing to sell their foreign currency in a legal exchange market, but they cannot do so because of the difference between the state exchange market and the informal one, which is illegal,” Gil explained.

The Cuban Economy Minister said that, although the sanctions of the U.S. embargo are maintained, the exchange entities will begin to receive dollars in cash, with the aim of capturing the foreign currency available in the country.

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Although he did not say on what day this exchange market will start operating, nor at what price the foreign currency will be sold and bought, he said that the last steps are being taken to establish this exchange market.

The purchase of foreign currency is also for all those who are going to arrive to the country (tourists and travelers), who do not buy in the state markets but in the informal market and leave the foreign currency to their relatives.

The official exchange rate of 1 dollar for 24 pesos does not encourage people to exchange. People and tourists prefer to exchange in the informal market, where a dollar can be worth more than 120 pesos.

Gil said that supply will not change overnight and that the foreign currency captured will be used to replenish Cuban commerce and the economy in general and to increase supply and achieve price stability.

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“None of these measures has a 24-hour effect, but rather they objectively place us on a path of gradual recovery of the economy, whose impact is still scarce in the domestic economy of the people,” he said.

The deputies of Cuba’s National Assembly applauded at length the speech of the Minister of Economy.

Meanwhile, shortly after the announcement, the price of the MLC (a kind of digital dollar) in the Cuban informal market began to fall, according to data offered by the independent media El Toque.

These seem to be the first effects and speculative movements generated after the announcement of the measures, since the official price at which the legal foreign exchange market will start operating in Cuba is unknown.

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