The Cuban Central Bank has implemented new rules to tackle inflation and off-the-books business in the country’s grave economic crisis. The regulations, which came into effect on Thursday, prohibit state and private businesses from using ATMs and restrict cash transactions between them. These measures are aimed at curbing the devaluation of the peso and promoting electronic payments.
According to official media, the new rules limit cash transactions to 5000 pesos and will be gradually implemented over the course of six months. The Cuban government has pegged the dollar at 24 pesos for select companies, tourists, and residents, but the informal market currently values it at 230 pesos. To address the rampant inflation – which the government estimates at 45% so far this year – and control the devaluation of the peso, the authorities are actively encouraging the use of electronic payments.
Economists argue that the official figures significantly underestimate the inflation rate, as they fail to account for the flourishing informal market. Inflation stood at 39% last year and over 70% in 2021, as reported by the government.
The country’s economy has faced severe challenges, resulting in shortages of essential goods and long waiting lines. Alejandro Gil, the Economy Minister, confirmed that gross domestic product (GDP) grew by 1.8% in the first half of the year. However, this growth remains 8 percentage points below pre-pandemic levels in 2019.
The crisis has eroded confidence in the state-run banking system, causing a shortage of cash at some ATMs as businesses heavily rely on them. The Central Bank’s new regulations aim to shift collections and payments between economic actors away from cash transactions and towards electronic methods.
(Reporting by Nelson Acosta; Additional reporting by Marc Frank; editing by Deepa Babington)
Credit: The Star : News Feed
