Cuba to end circulation of U.S. dollar

Last updated at 11:06 26 October 2004


Cuban President Fidel Castro, seeking to rid his country of the currency of his arch-enemy, said on Monday Cuba was ending circulation of the U.S. dollar as of Nov. 8 in response to tightened American sanctions.

Cubans, foreign residents and tourists will have to use locally printed convertible pesos, equal in value to the dollar, for all cash purchases, a Central Bank decree said.

'As of Nov. 8, the dollar will not be accepted in our shops, which will only take convertible pesos,' it said.

A 10 percent commission will be charged for changing dollars into the local currency, according to the decree read on a special television broadcast attended by Castro.

Appearing on television in a sling only five days after falling and fracturing a knee and an arm, Castro said the issue was so important that he had to be there despite Wednesday's accident that left his left leg in a plaster cast.

'The empire is determined to create more difficulties for us,' he said, referring to Bush administration steps to restrict travel and cash flows to the island nation.

The dollar was legalized in Cuba in 1993 after the fall of the Soviet Union plunged the island into deep economic crisis and forced it to open up to tourism and foreign investment.

Dollars became the dominant currency and are used to buy most consumer goods in dollar stores that will now only accept the local currency.

The decision will effect cash remittances from the United States, a major support for the cash-strapped Cuban economy that amount to an estimated $1 billion a year, unless they are sent in other currencies.

The government encouraged Cubans living abroad to send remittances to their relatives in Cuba in euros, British pounds, Swiss francs or Canadian dollars, to avoid exchange costs.

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