The government in Havana set a new exchange rate for the US dollar on Wednesday. The new government purchase rate has been 120 pesos since this Thursday and is five times higher than the official exchange rate. This is almost equivalent to the US dollar value on the black market. However, the new purchase price only applies to natural persons. The official exchange rate of 24 pesos still applies to state-owned companies.

According to central bank chief Marta Sabina Wilson González, the new exchange rate will not be static. The measure is intended to encourage the population to pay in the national currency.

Economy and Planning Minister Alejandro Gil Fernández justified the decision by saying that a low exchange rate drives US dollar buying and does not provide an incentive to sell the US currency. But the market needs a balance. Therefore, setting a lower exchange rate would be economically and politically irresponsible. However, this does not mean that the state will start selling foreign currencies to citizens, said Fernández.

The government in Havana wants to boost the local economy and counteract the black market with the new state-determined purchase rate for the US dollar. Accordingly, this is the first step on the way to a new foreign exchange market in Cuba, where all currencies will be accepted in the future.

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Source: RT