From our Bureau of Shady Banking Practices in Socialist Latrine American Totalitarian Hellholes
All of the world’s news agencies are making a big deal out of Castro, Inc.’s unexpected decision to allow U.S. dollars to be deposited in its banks.
Economists are scratching their heads, and so are Cubans on the island. Can anyone really trust Castro, Inc. to offer the best possible exchange rate? Even worse, can anyone really trust Castro, Inc. not to suddenly seize all dollar accounts?
Aaaah, the many wonders of Castrogonia.
Loosely translated from 14yMedio
None of the many people who were queuing this Wednesday at a bank in Central Havana was going to deposit dollars, something that can be done as of this Tuesday by order of the Central Bank of Cuba. On the contrary, they were suspicious of the new government measure, which reverses a “temporary” ban issued in 2021.
When a young man in his thirties entered, intending to deposit $100, an elderly man in line dissuaded him from doing so. “When it is deposited, it is automatically converted into MLC [freely convertible currency], and the change is one to one,” said the man, who countered that the US currency is much better paid on the black market. “An MLC is a virtual dollar, it does not compensate. As far as I am concerned, at least, it would not occur to me to put the dollars in a bank. I exchange them on the street for pesos and with that I buy food.” And he joked: “The dollar was imprisoned and now they released it,” before the young man was convinced and left the branch.
Meanwhile, on Boulevard de San Rafael, money changers seem to flourish on the left, something that was common around the official exchange houses (Cadeca), such as the one near Neptuno Street. “I don’t know if this is because of that measure or what, but they weren’t here before,” says a neighbor of the place. “They are desperate to buy dollars from foreigners.”
The experts, for their part, have criticized the umpteenth monetary lurch of the Cuban government and link it to the failure of the so-called Ordering Task (the restriction on depositing dollars coincided with the first months of implementation of that policy). Thus, Pedro Monreal: “The components of the ‘regulation’ (monetary and exchange unification, macro-devaluation of the peso, end of subsidies, increase in wages and prices) ended up enhancing the effects of the pandemic and placing the country in ‘stagflation’ from which no way out is in sight, says the Cuban economist in a Twitter thread, also listing: “Capped prices, partial dollarization, online importing rackets, atrophied exchange markets, inspectorates, and now the re-acceptance of USD [dollars] in the banks, are actions that are not only marginal but also contradict the model of ‘regulation'”.
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