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Cuban
government could reconsider economic measures
MIAMI, 7 - After seeing how managers and foreign
companies doing business in Cuba got upset by
the announce of new controls of foreign exchange
in state-run enterprises, Cuban government could
reconsider the measures, said Reuters in a dispatch
from Marc Frank in Havana.
The decree -eliminating the use of dollars in
transactions among Cuban enterprises- was announced
by the Central Bank in July 21, and state-run
entities were ordered to hand over their dollars
and ordered to buy it from Central Bank for their
purchases from joint ventures in Cuba, imports
and debt payments.
But foreign suppliers and businesses in Cuba
that sell products to the state-run enterprises
complained that they will face further delays
in collecting payments and arrears from the cash-strapped
state.
Reuters said that business sources have informed
that some foreign companies have stopped doing
business with Cuban companies until the government
clarifies how and when they will be paid, although
Central Bank's President Francisco Soberon has
being trying to calm their fears.
Reuters said that another source commented that
Castro has commented at party meetings that the
decentralized trade had gone too far and too many
dollars were in circulation.
The decree also ratcheted up government controls
over the accounts of state banks by regulating
how much foreign currency they are allowed to
have on hand and slapping new controls on Cuban
accounts abroad. Foreign banks responded saying
they would no longer accept letters of credit
from Cuban banks as there was no guarantee they
would be paid.
In July 23, another resolution said that "letters
of credit issued by Cuban banking institutions
... will be considered payment transactions that
already have the Cuban Central Bank's approval."
According to Reuters, diplomats have said that
foreign governments and banks are demanding a
similar exception for lines of credit.
Late last week the Central Bank reduced its commission
for exchanging dollar for convertible pesos from
2 percent to 1 percent after local companies and
foreign businesses protested. The bank has also
waived currency controls for transactions of less
than $5,000, business sources said to Reuters.
Joint ventures between foreign investors and
the Cuban government were exempted from the new
exchange control, but now must wait for local
clients to seek approval to pay them.
Cuban banks processing dollar transactions submit
approval requests to the Central Bank only twice
a month, foreign business sources said. In each
case a detailed one-page form is needed describing
what the dollars will be used for. The Central
Bank has 16 to 30 days to respond from the date
of the request.
Reuters quotes a Cuban government official as
saying: "Let's say there is only $50 million
in hand and the requests amount to $75 million.
There are priorities, so someone is going to be
denied."
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