Cuban Airports - Keep The Pesos, We Don't Have Dollars ... Or Any Other Currency

[Nino]

So if you travel to Cuba and want to exchange the last Cuban Pesos back into Dollars, Euros or any other hard currency at the Airport before take off ...... fugget it, and neither Habanos nor Nickel or Remittances will save the day - only the "trade in doctors" brings in some cash :

The Cuban government runs out of dollars and suspends the sale of foreign currency at airports
The exchange houses announce the measure a few hours before its entry into force this Thursday
14ymedio, Havana | May 20, 2021

https://www.14ymedio.com/economia/Gobierno-dolares-suspende-divisas-aeropuertos_0_3097490221.html

Without prior notice, the exchange houses (Cadeca) of Cuban airports stopped selling foreign currency this Thursday due to lack of cash. The news was announced by the state entity in a message spread through its social networks a few hours before the entry into force of the measure.

"At present, taking into account the limited availability of foreign currency in exchange houses, we are forced to adopt the decision, as of May 20, 2021, to suspend the freely convertible currency redemption service (MLC), at the offices located at international airports, "the statement reads.

Cadeca maintains that the low influx of tourists with the pandemic has caused a "significant deficit" in foreign exchange and that to date it has been able to operate within the established limits, but the lack of liquidity has reached an unsustainable extreme.

Airports were changing up to 300 CUC per person or 7,200 pesos, with the official change of 24 pesos per dollar, which in the informal market already reaches 55.

In January, the president of Cadeca, Joaquín Alonso Vázquez, explained that, while the Ordering Task lasts and in the first six months agreed for the monetary unification, the CUC could be exchanged for national pesos or another available currency. "Sometimes there are clients who want dollars, but if at that moment we don't have dollars we have to give them euros," he said.

Now, the lack of availability has reached the point of having to suspend the sale of all currencies in the most important exchange place in the country.

Clients have reacted to the publication with outrage at the lack of foresight that suddenly forces them to run out of money. "And they come to notify him now, who had a flight tomorrow and had plans to change his money, what does he do? Does he eat it? Because they have notified him just the day before and at night."

Until now it was forbidden to export national currency and it was mandatory to exchange pesos and CUC at airports before leaving the country. With the suspension of the sale of foreign currency, travelers will have no option other than to take the national currency and try to exchange it for foreign currency abroad, where, with the exception of some places in Cancun (Mexico), the Cuban peso is not quoted .

Users reproach that, despite the fact that there are more and more stores selling products, even basic necessities in free convertible currency and there is not a day without announcing more items available only with currencies, when it comes to wanting to change the currency are without it.

Other comments on social networks express great concern at the seriousness of the country's financial situation and ask for an immediate rectification on the part of the Government because "the patience of the Cuban people has limits."

In mid-March, the first worrying data of the drop in tourism in Cuba emerged. The entries collapsed 95.5% in the first two months of the year and in the entire first quarter, fewer than 7% of travelers arrived than in the same period of 2020, 76,913 people compared to 1,230,934. Although the pandemic has caused a tsunami in the sector worldwide, the island's dependence on it due to its weight and because it is one of the largest sources of foreign currency, make the catastrophe even greater.

This coincides with the decline in Cuba's main source of income: remittances. In 2020 the country entered 54.14% less money in this concept, falling from 6,616 million dollars in 2019 to 2,967 million in the year of the pandemic. Also the Venezuelan highway, the main support of the regime in recent years although in progressive decline, has been reduced to a minimum.

Cuba must also face the payment of several outstanding debts and, although the main creditors - the London Club and the Paris Club - are offering facilities ranging from write-offs to deferrals, it is doubtful that the authorities can now assume a reasonable timetable to satisfy the agreed amounts. Since at the end of the 1980s Fidel Castro led a crusade among poor countries to oppose the payment of debts, the Island has not been able to access international markets to finance itself, not even in extreme situations like the current one.

Inside, the situation does not improve. The government's campaign to minimize imports at the moment is more media than effective because even accepting that some of the legislative changes work, it would take time to minimally reverse the situation. In this context, dependence on imported products continues to be very high and represented a cost of more than 8,000 million dollars in 2020 while exports remained at just over 2,300 million.

To finance this deficit of almost 6,000 million dollars, Havana counted on tourism, Venezuela, remittances and the sale of medical services abroad. Of this, only the health missions and something of the ally of Caracas remain, in addition to the enormous benefits that it gets in the foreign exchange stores.

In 2020 alone, and despite the vaunted embargo, the Island invested 163 million dollars in buying food from US companies, a figure, in any case, much lower than the almost 258 million dollars in 2019. Cuba imports meat from the United States. chicken - Brazil is another of its main markets for this product-, soybeans, wood pulp and rice, among others.

Currently, the great assets of the Government to attract foreign currency are tobacco, nickel and, above all, medical missions. In the case of the former, the figures remain positive although they are also on the decline. The Spanish-Cuban company Habanos obtained last year 507 million dollars in profits, 4% less than in 2019.

Cuba has a third of the world's known nickel reserves and is the world's ninth largest exporter. Nickel sales went from $ 1,465 million in 2011 to less than $ 500 million in 2016, according to official statements. According to the comments circulating in the industry, exports have fallen even more in the last three years.

Medical missions, the only line of business that this year, thanks to the pandemic, has been favored (along with the biopharmaceutical industry, in which Cuba puts more and more efforts), report about 8,000 million dollars annually according to the latest data made public in 2017. A few years earlier, in 2012 and 2013, the figure set a record with close to 10 billion dollars thanks to the generosity of Hugo Chávez.

[NSXCIGAR]

I could have told you once you have CUP you'll never see USD again. 

Pretty soon you're going to see CUP in wheelbarrows like Weimar Germany.

[Nino]

2 minutes ago, NSXCIGAR said:

I could have told you once you have CUP you'll never see USD again. 

Pretty soon you're going to see CUP in wheelbarrows like Weimar Germany.

No need to go back to Weimar - just fast forward to Caracas/VeneCuba last week ...

 

 

[chris12381]

20 minutes ago, NSXCIGAR said:

I could have told you once you have CUP you'll never see USD again. 

Pretty soon you're going to see CUP in wheelbarrows like Weimar Germany.

Or arts and crafts made of Venezuelan Bolivars...

[Kevin48438]

Lol.  I have some questions.  For starters a glossary:

CUC

CUP

Cuban Pesos

MLC

Why would a visitor to Cuba exchange their currency to Cuban currency?  What can one buy with Cuban currency that can’t be bought with foreign currency?

[Nino]

13 minutes ago, Kevin48438 said:

Lol.  I have some questions.  For starters a glossary:

CUC

CUP

Cuban Pesos

MLC

Why would a visitor to Cuba exchange their currency to Cuban currency?  What can one buy with Cuban currency that can’t be bought with foreign currency?

CUC - No longer around.

CUP - Cuban Peso. only currency around now but sadly undervalued at its official exchange rate of 24 CUP to a Dolllar is way below the unofficial rate of 55 CUP..

Cuban Pesos - see above.

MLC - Moneda Libre Convertible or any hard currency available.

Quote

Why would a visitor to Cuba exchange their currency to Cuban currency?  What can one buy with Cuban currency that can’t be bought with foreign currency?

Good question - next question.

[El Presidente]

If it wasn't for the fact it has been said so many times before.....

 

This circus can't go on much longer 

[griller]

1 hour ago, El Presidente said:

If it wasn't for the fact it has been said so many times before.....

 

This circus can't go on much longer 

I completely hear ya! This time, it may play out. For the 1st time in decades, there isn't a Castro officially running the show. Maybe Raul sees the writing on the wall & decided to try to preserve whatever "legacy" he feels is owed the Castro name. Not having currency for exchange is a pretty big deal, and when you figure the terrible industrial, social, and economic impacts they're experiencing, they may get to the point where they can't feed their people. They're not far now... Will the military continue to stand behind the party?

 

[Nino]

13 hours ago, griller said:

 Not having currency for exchange is a pretty big deal, and when you figure the terrible industrial, social, and economic impacts they're experiencing, they may get to the point where they can't feed their people. They're not far now... Will the military continue to stand behind the party?

 

Yes, the military will stand behind the party as they have all the privileges still and the most to lose as the military controls roughly 70% of the economy.

It is indeed getting worse by the day about the currency crisis in Cuba.

Today's news are that even state companies and private entrepeneurs will have to suffer gvmt control over their accounts :

https://www.14ymedio.com/cuba/Gobierno-cubano-empresas-estatales-privadas-bancarias_0_3097490236.html

The Government will regulate the foreign exchange in bank accounts of state companies and the private sector

It is "another bolt to the control of currencies", said the economist Elías Amor 14ymedio,

Havana | May 20, 2021

The Government limits the use of accounts in freely convertible currency (MLC) of state companies and self-employed persons authorized to sell in dollars, following the approval this Wednesday of Resolution 157/2021 of the Central Bank of Cuba (BCC).

The legal norm, which will come into effect on June 3, stipulates that all operations in both the state and private sectors must be carried out in Cuban pesos and foreign exchange from commercial exchanges cannot be extracted.

According to Elías Amor, a Cuban economist living in Spain, this is "yet another blow to the control of foreign exchange." "The regime has set its sights on the private sector, practically decimated by the crisis of the pandemic, and now it wants to 'intervene' the scarce resources it possesses, especially in foreign exchange," Amor wrote on his blog Cubaeconomía.

Last year, the Government had authorized the opening of current accounts in foreign currency of private entrepreneurs so that, with the mediation of a state company, they could sell their products abroad.

"The dollar is drained directly into the state coffers once people buy the products or services they need, and the stores prepare all their accounts in Cuban pesos, despite the fact that the sale prices were in dollars," reflects Amor .

The economist called the new change on the island, a "muddle of accounting and falsification of economic information." "The country's currency situation is critical. Under these conditions, maintaining the exchange rate of the Cuban peso against the dollar at 24x1 is a serious mistake. Another devaluation is becoming urgent," he said.