Cuba is facing a mounting cash crisis, with citizens struggling to access funds for everyday transactions amidst long queues forming outside banks and ATMs in the capital city of Havana.
The shortage of cash has become a pressing issue, exacerbating the country's already dire economic situation, described as one of the worst in decades.
Reports from the Associated Press on Sunday (Apr 28) highlighted the scenes of frustration and inconvenience as people waited for hours, only to find that the cash reserves had run dry when their turn finally arrived.
Twenty-three-year-old Alejandro Fonseca shared his ordeal, recounting how he spent the morning in line, only to travel kilometers to another branch in search of money.
"It shouldn’t be so difficult to get the money you earn by working," Fonseca expressed, echoing the sentiments of many grappling with the cash shortage.
Economists like Omar Everleny Perez have shed light on the multifaceted reasons behind the crisis.
Perez points to the government's burgeoning fiscal deficit, the absence of banknotes with higher denominations than 1,000 Cuban pesos (approximately $3 in the parallel market), persistently high inflation rates, and the reluctance of cash return to banks as key factors contributing to the shortage.
While cash exists within the economy, Perez notes that much of it remains outside the formal banking system.
Instead, it is hoarded by entrepreneurs and owners of small- and medium-sized businesses, who often deal in cash transactions due to the challenges of importing supplies and operating in a predominantly cash-based economy.
For many entrepreneurs, hoarding pesos becomes a strategy to later exchange them for foreign currency on the informal market.
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