The Cuban government approved a document regulating the "partial dollarization of the economy," as announced by Prime Minister Manuel Marrero Cruz during the fourth ordinary session of the National Assembly.
This measure, which reflects the increasing influence of the US dollar in the country, aims (for the umpteenth time) to reorganize key sectors of the economy while attempting to manage the impact of the informal currency market.
The partial dollarization scheme will cover the following sectors: wholesale and retail trade in previously approved currencies; and the payment of tariffs and services related to foreign trade for non-state management forms.
Similarly, cash payments in dollars will be accepted in strategic sectors such as tourism, Casas del Habano, pharmacies, optical shops, international clinics, and airports. Additionally, payments in foreign currency will be made to agricultural producers who replace imports and to those who manufacture exportable goods.
According to the regime, this regulation will also allow greater flexibility in the use of foreign currencies for specific economic activities, such as tourism and foreign trade, which are key sectors for generating income during the economic crisis.
Contradictions and Challenges
Despite this openness, Marrero reiterated that the government aims to move towards the de-dollarization of the economy. However, he acknowledged that informal dollarization is out of control, driven by a parallel exchange market that operates outside official regulations.
"In the economy, there is a dollarization that has been beyond control, driven by the informal exchange market," he admitted.
The prime minister has precisely blamed the informal market and the private sector for the dollarization, citing that prices are being set according to this exchange. He issued a warning: no one can sell in foreign currency without proper approval.
The communist regime faces an economic dilemma: the need to attract foreign currency while pursuing its policy of de-dollarization. This new measure marks a shift in the economic strategy, aimed at mitigating the impact of the country's structural crisis and maintaining control over vital sectors, as the dollar continues to play an increasingly significant role in the daily lives of Cubans.
This measure reflects an unavoidable reality: the dollar is solidifying as a key currency in a system that struggles to maintain stability.
Frequently Asked Questions about the Partial Dollarization of the Cuban Economy
What does the "partial dollarization" of the Cuban economy imply?
"Partial dollarization" implies that the U.S. dollar will play a more prominent role in certain economic sectors of the country. This includes wholesale and retail trade in foreign currencies, the payment of tariffs and services related to foreign trade, and the acceptance of cash dollars in strategic sectors such as tourism and international clinics. This measure aims to reorganize key sectors and regulate the informal exchange market amid the economic crisis facing Cuba.
Why is the Cuban government once again accepting cash payments in dollars?
The Cuban government has decided to once again accept cash payments in dollars in order to attract more foreign currency amid a severe economic crisis. This is part of a "Macroeconomic Stabilization Program" aimed at controlling dollarization and improving liquidity in the country. The measure is being implemented in sectors such as tourism, where credit cards often do not work, impacting the government’s ability to generate revenue.
How does this measure affect the informal exchange market in Cuba?
The measure aims to regulate and reduce the influence of the informal currency market, where the dollar has been trading at much higher rates than the official ones. However, the informal market remains a crucial avenue for Cubans to access foreign currency, as the government has been unable to establish an official exchange rate that reflects the actual economic conditions. This has led to fluctuations in the value of the dollar in the informal market, further complicating the country's economic situation.
Which sectors will accept cash payments in dollars?
The sectors that will accept cash payments in dollars include tourism, the Casas del Habano, pharmacies, optical shops, international clinics, and airports. Additionally, payments in foreign currencies will be allowed for agricultural producers who substitute imports and for manufacturers of exportable goods. This is part of an effort to reorganize and improve the efficiency of key sectors in revenue generation.
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