Thu, Oct 28, 2004 page12

• Cuba bans transactions in US dollars from Nov. 8

  MAD SCRAMBLE Cubans flocked to banks this week to exchange their dollars into convertible pesos, for use in local shops, but that has no international value

  • AFP
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  Jittery Cubans scrambled to banks on Tuesday after unsettling news that US dollars, widely in circulation on the island since 1993, would be banned from commercial transactions in a mere 14 days.

  "It is not only a macroeconomic measure," said a weary university professor. "This affects everyday household economic life for all Cubans, and that's scary. It moves the ground under everyone, because we all depend on dollars," the professor, who did not give his name, said.

  Castro speaks

  President Fidel Castro himself made the announcement in a speech late Monday, saying the measures were a response to "mafia-like" moves by the US government of President George W. Bush limiting money transfers to Cubans from US relatives as well as family visits to the island.

  Starting Nov. 8 hotels, restaurants, car rental agencies and taxi drivers will accept only so-called convertible pesos, a local currency that can be used in specialized stores on the island but has no international value.

  Cubans will still be able to hold some US dollars, but using them in commercial transactions or in retail will be banned.

  Banks will soon stop conducting dollar transactions, and companies or people with dollar-denominated accounts will have to change them to convertible pesos.

  The first task of many Cubans on Tuesday was getting hold of one of the two national newspapers -- Granma and Juventud Rebelde (Rebel Youth) -- that reproduced Castro's complete speech.

  "Cuba recovers complete sovereignty over its currency," trumpeted Juventud Rebelde, while Granma headlined the words Castro used in his late Monday speech: "Nothing or anyone will intimidate or threaten us."

  Central Bank Resolution 80/2004 left plenty of doubts and concerns.

  "It's a low blow," a furious former bureaucrat who now owns a private restaurant said on condition she not be named.

  Later, a bit calmer, she changed her tune. "Well, the truth is I don't know, I haven't been able to read the law."

  Central Bank President Francisco Soberon announced a telephone number for citizens to call for more information, and officials announced a special radio and television broadcast edition of Round Table, a discussion panel which on Tuesday will include Bank officials discussing the measure.

  The main concern here is over dollars sent by Cubans living abroad -- mainly exiles living in Florida -- that arrived as cash aboard traveler's luggage.

  "What do I do now? My family sends me US$100 a month, and if I have to pay a 10 percent surcharge, I lose US$10, which for me is very important," said a housewife.

  Surcharge

  Cubans have until Nov. 8 to warn their foreign benefactors to "no longer send their cash gifts in dollars, but in other currency such as euros (or) Canadian dollars ... which will not have a 10 percent surcharge," Castro said.

  In Washington, the US State Department said Castro's measure proves that Bush's tightening of the US embargo, in place since 1961, is succeeding.

  "We think that this move is yet another indicator that Castro is refusing to do what's best for his own people. It shows that he's cynically trying to preserve a bankrupt regime at his people's expense," spokesman Adam Ereli said.
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