For the first time, the Cuban government allows private individuals to hold foreign currency accounts and conduct transactions with them. This measure, part of a legislative package, imposes an 80% retention coefficient for certain foreign currency incomes, which must be delivered to the Central Bank. The goal is to boost foreign currency revenues and enable legal imports.
The Cuban government has introduced a new mechanism for managing foreign currencies, published in the Official Gazette on Thursday. This package includes a decree-law and three resolutions affecting all economic actors, whether state-owned, private, cooperative, national, or foreign. The initiative pursues partial dollarization until the Cuban peso can be reinstated as the sole legal tender.
Private businesses and self-employed workers can use their foreign currency earnings to import raw materials but must deliver 20% of the balance to the Central Bank at the official exchange rate, which is below informal market values. An 80% retention coefficient applies to incomes from exports, e-commerce with overseas payments, sales to Mariel Special Development Zone (ZEDM) users and concessionaires, foreign investment modalities, and entities authorized for foreign currency trade. For other legal sources outlined in Article 5, 100% retention is allowed.
Retained currencies can be sold on the foreign exchange market or used for authorized payments, promoting productive linkages and import substitution. The regulation addresses long-standing private sector demands for a legal currency market, which previously drove parallel trading and exposed businesses to license revocation risks during inspections.
Bank accounts in foreign currencies are now authorized for private individuals, enabling direct import payments without currency exchange. The ACAD system introduces purchase authorizations for foreign currency from the Central Bank, requiring available national currency and non-transferable permits. Domestic transactions will primarily use pesos, with exceptions for ZEDM operations, wholesale-to-retail in foreign currency, and mutually agreed foreign currency payments between exporters and domestic suppliers.
Foreign investors collect and pay in foreign currencies and can operate domestically with both. Private individuals must trade in pesos but can receive foreign currency payments from customers, with the option to convert to pesos. Agricultural producers recognized as exporters or import substitutes will receive incomes in foreign currency accounts.
This approach may enable the state to regain oversight of previously illegal foreign currency flows, aiding payments for essential supplies like fuel.
