Cuba temporarily suspends cash deposits in dollars, cites embargo hurdles

·2 min read

Cuba announced Thursday that banks in the country would temporarily stop accepting cash deposits in dollars beginning June 21.

The move, the country's Central Bank said, was due to U.S. sanctions and "extreme" economic measures that restrict the use of the American currency abroad.

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"In view of the obstacles that the U.S. embargo creates for the national bank system to deposit abroad the U.S. dollars that are collected in the country, a decision was made to temporarily suspend deposits in U.S. banknotes in Cuba’s bank and financial system," the bank said in a statement shared during a roundtable discussion with Central Bank leadership broadcast on state TV.

Central Bank Vice President Yamilé Berra Cires cited the loss of partnerships with foreign banks, including 24 that stopped operations with Cuba since the beginning of former President Trump's administration.

Additionally, Berra Cires said that more than 190 actions by roughly 95 foreign banks were reported against Cuban banks.

"It is ever more difficult for Cuba to find international banking or financing institutions willing to receive, convert or process U.S. currency in cash," the bank said in the statement.

The Central Bank said that it would still accept transfers without "limitations" and account holders will still be able to withdraw money from dollar accounts.

Deposits in other currencies will also be accepted.

There was no indication of exactly how long the temporary suspension would last, though the statement said its duration would depend on the removal of financial restrictions.

"We had no choice but to take this measure, which we are explaining at the Round Table, as we always do when it is a measure that affects the people, who will understand that there is no other option," Minister-President of the Central Bank, Marta Sabina Wilson González, said.

The move came before the Cuban government was slated to present its annual resolution to end the long-standing U.S. trade embargo at the United Nations General Assembly.

The country had a 10% tax on dollars in place for many years which it lifted in July 2020 amid the COVID-19 pandemic.

The Miami Herald reported on Friday that the U.S. dollar in Cuba's black market has soared to around 70 Cuban pesos – an amount almost three times the exchange rate.

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This came after the country reportedly began to open "dollar stores" selling hard currency in 2019 and saw a drop in remittances and tourism.

While President Biden said he would reverse some of Trump's measures on Cuba during his campaign for office, the U.S. government has said a shift in policy is not a top priority.

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