Sunday, May 28, 2023

The Cuban government recognizes the problems in the official foreign exchange market

The Cuban government, through its Minister of Economy and Council of Cuba, Alejandro Gil Fernández, has recognized the problems of the public exchange market, effective from August 2022.

One of the main restrictions of the Cuban market is the limitation of foreign currencies sold. Now, the maximum you can sell is the equivalent of one hundred dollars per person.

This limitation has generated long queues that exceed hundreds of days in Exchange Houses and banks, the issues authorized to carry out these transactions. These long lines reflect the difficulties and frustrations that Cuban citizens face in accessing foreign currency.

In a speech, this Thursday, at the National Assembly of People’s Power, Gil Fernández emphasized that the market is limited, not according to the rules of free accessibility, as reported by Cubadebate.

In addition, the prime minister admitted the existence of an informal market, where the exchange rate exceeds 180 or 190 Cuban pesos for 1 USD.

This gap between the official market and the informal market indicates the persistence of a parallel market that has not been eradicated and casts doubt on the capacity of the official exchange market to satisfy the external exchange needs of people and industry.

The Minister of Economy confirmed that a million more foreign currency was taken than before the implementation of the exchange market. These captured currencies are invested in the reactivation of state and national industries, such as electronics and agriculture, as well as in the purchase of essential products, such as rice, pork and toiletries.

Alejandro Gil Fernández confirmed that the commercial market works with its sources, which means that if more money is bought, the capabilities of boosting the national industry and selling currencies to increase the population, but he recognized that the sale of populations is not yet enough.

In an attempt to stimulate the purchase of foreign currency by the government, policies were taken in the macroeconomic framework. However, each of these has not been specified, which leaves doubts about their effectiveness and scope.

When the Cuban government authorized the purchase and sale of foreign currency in Houses and banks of exchange, the goal was to take that money, however, despite time and the warnings of independent economists, conditions arose that show little efficiency and effectiveness.

Nation World News Desk
Nation World News Desk
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