Narayan AmmachchiCubans are storing US dollar bills in a desperate bid to safeguard value for their earnings, as the peso falters in the face of the deteriorating business climate on the island.
Officially speaking, one US dollar fetches 24 Cuban pesos, but Cubans are paying as much as 50 pesos to take hold of one US dollar on the black market.
Cubans are well aware that their currency lacks credibility because its value is not judged at forex exchanges but by the country’s communist regime.
Economists have long been arguing that the currency is overvalued, reports French news agency AFP. Many Cubans are fearful that their currency may face a fate similar to that of Venezuela, where people stand in queues for days on end to take food handouts.
The communist government has banned people from storing the US currency, but the dollar is critical to pay for imports.
With the COVID-19 pandemic continuing to keep foreign tourists at bay, Cuba’s economy has slipped back into recession. Its dollar reserve has been decreasing by the day ever since the Donald Trump administration re-imposed restrictions on remittances.
So many Cubans have slipped back into poverty that many people in the country are struggling to purchase basic goods and pay for utility services, according to US news outlet WLRN.
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