In Havana, Cuba, a recently opened grocery store is now the first on the island in nearly two decades to accept hard U.S. currency. This reflects a shift towards dollarization in the Communist-run country. The store, which has been open for a few weeks, is receiving praise from those fortunate enough to have dollars in a place where cash deposits in U.S. dollars were halted just four years ago.
Yuliani González, upon exiting the white-washed grocery store, remarked, This supermarket is quite good... but not everyone has the possibility to buy here. The store is located near the sea in Miramar, an area popular among foreign diplomats.
Cubans with access to dollars can now purchase gasoline without waiting in long lines, book a rental car or luxurious hotel room, and soon, recharge their cellular data plans. Cuban officials view this "partial dollarization" introduced a year ago as a necessary remedy to the country's struggling economy, impacted partly by the U.S. trade embargo and associated sanctions.
Regrettably, worsening relations between Havana and Washington were observed this week after President Donald Trump revoked measures implemented by the Biden administration, which would have facilitated Cuba's dollar acquisition. This is expected to intensify the dollar shortage, according to Cuban officials and economists.
Cuban authorities aim for dollar stores to collect remittances entering the country, utilizing the hard cash to support social programs including free healthcare, subsidized food, energy, and transportation. The evolution from the CUC to the MLC, a digital currency tied to the dollar in 2021, aimed to generate foreign currency without relying on physical dollars.
The government's dollar equivalent fluctuates as they struggle to back it with cash," stated Cuban economist Omar Everleny. "They urgently need cash. It is anticipated that dollar acceptance will extend to stores nationwide.
Nevertheless, the increasing availability of dollar-priced goods and services highlights a growing gap between individuals with access to remittances and other foreign currency sources and those without, as underscored by economists like Everleny. Housewife Odisbel Saavedra Hernández, who receives U.S. dollars from her husband abroad to support her children, expressed her hopes for wider availability of such markets across the country, emphasizing equal access for all.