Cuban government to buy foreign currency at 120 cuban pesos, but will not sell

foreign exchange market in Cuba

This Thursday, August 4, Cuban monetary institutions will begin purchasing foreign currency from the population at an exchange rate of 1USDx120 CUP.

This purchase will include the dollar in cash, whose entry into banks was suspended on June 23, 2021; however, in financial institutions they may only be sold and not used to recharge accounts in freely convertible currency (LCM).

Marta Sabina Wilson González, as Minister President of the Central Bank of Cuba, said that this market will not solve the problems of the domestic economy, but it will be accessible to all persons, residents and non-residents.

She said that as of this Thursday people can sell their foreign currency in three possible ways: through transfers from abroad (someone who indicates from abroad to deposit it in CUP), through direct sale from accounts in MLC and the sale of cash in banking institutions.

She explained that ATMs will continue to dispense the 1×24 exchange rate and therefore no transactions should be made through these channels with the new exchange rate.

She said that transactions from abroad will have a range of between 2% and 9% of commercial margin, so that more sales will be made by this means than in cash. However, the following table exemplifies how much a person will receive in reality.

He informed that these operations will not be carried out in all bank branches, but only in the provincial capitals, mainly.

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According to what Alejandro Gil said at the Round Table, although the U.S. sanctions that do not allow Cuba to use the USD in usable money are maintained, they will buy them from the population, a decision that is still not understood since the Cuban government assures that it cannot use them, and nevertheless, it will collect them. 

He said that they will only start with the purchase and “later” sell to the population “as conditions are created”. 

He explained that the government does not have enough money to sell foreign currency to the population, since what is available is only that which is used in other sectors of the economy. 

He said that the 1×24 exchange rate is maintained even if a different exchange rate is established for purchases from the population. 

Gil said that the stability of the exchange market will be guaranteed because they must collect the foreign currency that is sold in the informal market at a higher price than the official rate. 

However, he recalled that in order for the Cuban peso to acquire its real value they need to increase production in order to increase supply and supply. 

He reminded that this measure allows people to have “legality” and to be able to exchange their foreign currency without the risks of the informal market.

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