2023-08-09 11:04:00
“Not a chance! You can’t give anything to the bank,” says Lisandra Pupo, a mechanical engineer skeptical of the “bankarization” of economic operations announced by the Central Bank of Cuba, which is trying to reduce the number of notes in circulation in the country.
The new measure, which came into force last Thursday (3), will oblige both the population and companies to carry out, for six months, most of their financial transactions through electronic channels. However, Cubans believe that this solution will make it difficult for them to earn their own money, due to the technological limitations of the island.
“That is impossible. Now the ATM has no money or no connection,” said the 30-year-old engineer, denouncing the withdrawal limit of 5,000 pesos (about US$28 or R$137 at current exchange rates).
Since the Cuban government implemented the currency reform in January 2021, it is increasingly common for the population to carry wads of banknotes to pay a simple restaurant bill or a service at a mechanic shop.
“Today there is a significant level of money that is outside the banking system. This money does not circulate in the logical circuits of the economy and is only traded between individuals”, which is “encouraging the inflationary spiral”, explained Joaquín Alonso, president of the Bank Central, on Monday (7), in a program on state television.
When the monetary reform was applied, the Cuban Central Bank injected a good amount of working capital to “give purchasing power to the population”, given the expectation of price increases that accompanied an average salary increase of 450%.
However, authorities recognize that they face significant challenges given the lack of resources to install and upgrade card payment terminals at all establishments across the country.
For Rossel Garcés, a 32-year-old self-employed typographer, putting money in the bank is a problem.
Knowing “that I can only withdraw 5,000 pesos, that I’ve waited three hours in line, I’m going to another bank and wait in another line to withdraw another 5,000. Will I spend a week to withdraw 20,000 pesos?” asks, adding that many people on the island do not have access to smartphones to make transfers.
‘Scarcity’ and ‘inflation’
The independent Cuban economist Omar Everleny Pérez considers that “the very high prices and the non-existence of high-value banknotes” made “this bankarization necessary”.
Interannual inflation reached 45.8% in May, compared to the 39% registered in 2022, according to official data, but analysts indicate that this number has already reached triple digits.
The announcement also coincides with record exchange rates for the dollar (240 pesos or R$4.90) and the euro (245 or R$5.38) in the informal market, according to the independent portal El Toque.
Micro, small and medium-sized companies, licensed just two years ago, were also affected, as they will now have to do all their business electronically. These enterprises need dollars to carry out their imports and find it difficult to acquire them in the official market.
For private company consultant Oniel Díaz, these companies will lose the ability to import “in an environment of scarcity and inflation”, he said in a post on his Facebook profile.
The Cuban government recently stated that 100% of its basic food basket is imported, amid the worst economic crisis in three decades.
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