HAVANA, Cuba – A growing number of frustrated Cubans are facing challenges within the country’s monetary system, with shortages of cash causing long queues at banks and ATMs in Havana and beyond. Alejandro Fonseca, a 23-year-old Cuban, experienced this firsthand when he spent hours waiting in line at a bank ATM only to find the cash had run out before he could withdraw any funds.
According to Cuban economist and university professor Omar Everleny Pérez, the shortage of cash can be attributed to several factors related to Cuba’s deep economic crisis, considered one of the worst in decades. Pérez explains that a significant portion of the cash in circulation is being held by entrepreneurs and small business owners who are hesitant to return the money to banks due to distrust or the need to convert Cuban pesos into foreign currency.
Entrepreneurs and small business owners in Cuba often rely on importing goods in foreign currency, leading them to hoard Cuban pesos for future exchanges on the informal market. This practice further contributes to the scarcity of cash in circulation, making it difficult for individuals like Fonseca to access the money they earn through work.
Moreover, the complex monetary system in Cuba, which includes multiple circulating currencies and fluctuating exchange rates, adds another layer of difficulty for residents. Official exchange rates set by the government differ significantly from rates on the informal market, creating challenges for individuals looking to exchange currency. This disparity has led to a shift where a majority of the cash in circulation is now held by the population rather than in Cuban banks, impacting the overall availability of cash for everyday transactions.
In efforts to address the cash shortage, the Cuban government introduced measures to promote a “cashless society,” requiring the mandatory use of credit cards for certain transactions. However, many businesses have been reluctant to accept credit card payments, exacerbating the challenges faced by individuals seeking to access funds for essential needs.
High inflation rates in Cuba further compound the issue, as individuals require increasing amounts of physical bills to purchase goods and services. While official figures may suggest a decrease in inflation, market rates on the informal market can reach triple digits, significantly impacting the cost of living for Cubans. With average monthly salaries for state workers ranging between 5,000 and 7,000 Cuban pesos, individuals are struggling to cope with the economic complexities and inflation rates affecting their daily lives.
As Cubans navigate this intricate financial landscape, experts emphasize the need for comprehensive reforms to address the root causes of the cash shortage and alleviate the economic burdens faced by the population. Despite the challenges presented by the current monetary system, individuals like Fonseca remain resilient in their efforts to access the funds they rightfully earn, highlighting the ongoing struggles within Cuba’s economic environment.