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Cubans prefer to shop with dollars

Global News Briefs 30 Oct, 2019 Follow News

Cubans prefer to shop with dollars

Cubans flocked to a dozen shops that opened in Havana on Monday selling home appliances and spare parts for vehicles in dollars, as the cash-strapped government struggles to rake in tradable currency to purchase imports and pay its debts.

Washing machines, refrigerators, freezers, air conditioners, TVs, electric motorcycles, car batteries, tires and other goods were priced well below similar offers at other state stores, when available for sale in the government’s local dollar equivalent, the convertible peso.

Cuba’s inefficient state-run economy is going through a liquidity crisis due to the implosion of ally Venezuela’s economy and the tightening of the decades-old US trade embargo under President Donald Trump.

The country is dependent on fuel, food and other imports it must purchase for tradable international currencies it earns from exports of goods and services such as sugar, tourism and technical assistance, which are all in decline.

Shortages of everything from fuel to food and medicines have plagued the country this year.

The dollar circulated freely in Cuba alongside the peso after the demise of former benefactor the Soviet Union in the early 1990s sparked a crisis in the Communist-run country. The dollar was taken out of circulation in 2004 and replaced by the convertible peso.

Two currencies, the peso and the convertible peso, which is valued at 24 pesos, circulate in Cuba. Possession of the dollar and other tradable currencies is legal, but they have previously not been deemed legal tender for purchases.

The government claims the convertible peso is equal to the dollar, but imported appliances and other goods, when available, have huge mark-ups as they must be purchased in tradable currencies while the peso and convertible peso have no value abroad.

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