Cuba tries to purge dollar
HAVANA – Cubans and tourists lined up to change U.S. dollars into local currency Sunday, the last day to do so without paying a 10 percent surcharge that is part of a government measure to eliminate the dollar from circulation on this communist-run island.
As of last week, dollars no longer are being accepted at Cuban stores, restaurants, hotels and other businesses. The 10 percent surcharge taking effect today is meant to discourage people from bringing currency from Cuba’s No. 1 enemy to the island.
President Fidel Castro has said the widespread use of American money is being halted to guarantee Cuba’s economic independence.
“I was given this (dollar) last night, so I had to come here today – tomorrow, it will be worth only 90 cents,” Pedro Michelena, 82, said Sunday at a Havana cash exchange. He was holding the single greenback he had received from a group of foreigners for guarding their parked car.
The retired Cuban said he exchanged the other $26 he possessed last week for the Cuban convertible peso – the local currency tied to the dollar and now the dominant legal tender on the island.
For a decade, the dollar was Cuba’s dominant currency and was used to buy everything from shampoo to canned food to furniture. Now, Cubans as well as tourists visiting the island must use the convertible peso.
No figures have been provided on how many dollars have been exchanged or deposited since the currency switch was announced Oct. 25. Cubans, who still can hold U.S. currency, are believed to have been hoarding several hundred million dollars at home, most of it money received from relatives in the United States.
Some independent analysts believe many Cubans with savings will continue to maintain a dollar stash, though smaller.
Castro said the move is necessary to protect the island nation from an increasing U.S. crackdown on the flow of American currency into Cuba. The U.S. currency was made legal tender in Cuba in 1993 to help attract hard currency after the island lost Soviet aid and trade.