Cuba's Central Bank Adjusts Rules Amidst Cash Shortage Crisis

The Central Bank of Cuba (BCC) has announced new measures to ease the country's growing cash shortage and encourage digital payments. These changes aim to address economic challenges like inflation, power outages, and a general lack of liquidity.

A key change is the removal of the 5,000 Cuban pesos (CUP) limit for cash payments between economic entities, a rule in place since 2023. Now, businesses can arrange authorized cash amounts with their banks based on income, deposits, and digital payment usage.

📄 Where and When

These changes come into effect immediately, as announced by the BCC. The measures are designed to help all economic actors and individuals in Cuba, particularly those most affected by the ongoing economic crisis.

The primary parties involved are the Central Bank of Cuba, commercial banks, businesses (both state-owned and private), self-employed workers, and the general public, especially retirees and wage earners who rely heavily on cash.

📄 Why It Matters

This news is important because it highlights the severe economic pressure Cuba is under. The country is struggling to provide basic cash access for its citizens and businesses, directly impacting daily life and economic activity.

The measures attempt to balance the need for cash with the push towards digital transactions, which is becoming increasingly necessary given the devaluation of the CUP due to high inflation.

📄 What's Being Said

The President of the Central Bank, Juana Lilia Delgado Portal, acknowledged that the cash scarcity is a symptom of the broader economic crisis. She cited high fiscal deficits, money printing for public spending, inflation, and supply chain issues as contributing factors.

Despite the ongoing reliance on cash for many, Delgado Portal noted that over 80% of salaries and pensions are already paid via bank cards, which puts pressure on bank branches during withdrawal times.

📄 What Comes Next

The BCC is introducing new banknotes of 2,000 and 5,000 CUP to reflect the decreased purchasing power of existing denominations due to rising prices. These new bills will be distributed nationwide.

Additionally, businesses will act as "Extra Cash" points, allowing retirees to receive cash payments there, reducing queues at banks. Both consumers and businesses will receive incentives for digital transactions, with businesses getting immediate payment. The monthly limit for certain banking operations has also been raised significantly to 2.5 million CUP.