Reprinted from Caribbean Net News
caribbeannetnews.com
HAVANA, Cuba (AFP): Thousands of Cubans queued up Thursday to swap US dollars -- which have been legal tender here for over a decade -- for local convertible pesos, in a mad rush ahead of November 8, when US currency will be locked out of commercial transactions.
"And can you exchange any amount?" a young man asked at a government currency exchange window, despite blanket coverage by official media since the announcement.
"Are they going to ask you for your ID or to justify where you got the money from?" asked another in a long line in the Santos Suarez district.
President Fidel Castro on Monday announced the radical change in everyday business in Cuba, saying the measures were a response to "mafia-like" moves by the US government limiting money transfers to Cubans from US relatives as well as family visits to the island.
Starting November 8, hotels, restaurants, car rental agencies and taxi drivers will accept only "convertible pesos," a local currency that can be used in specialized stores on the island but has no international value.
Cubans will still be able to hold some US dollars, but using them in commercial transactions or in retail will be banned.
Banks will soon stop conducting dollar transactions, and companies or business people with dollar-denominated accounts will have to change them into convertible pesos.
So what's the rush? Anyone who exchanges dollars after November 8 will have to pay a 10 percent surcharge to the government.
"Nobody wants to lose", said a fiftyish man who arrived at the exchange queue on a bicycle.
And a retired military man, a government supporter, endorsed the change but observed, "They (the authorities) are going to collect a lot of money from this."
Most in line were retirees who receive hard currency remittances from relatives abroad. Family members send more than 800 million dollars a year to Cuba, making the foreign remittances a staple of the Cuban economy alongside tourism and ahead of sugar.
There was a discreet police presence at exchange windows and bank branches where some Cubans were looking to take advantage of what looked to some like a loophole: opening dollar-denominated savings accounts into which they can receive US-dollar transfers and withdraw dollars or convertible pesos without facing the 10-percent tax.
In 1993, in the midst of economic free-fall on the heels of the collapse of the communist bloc, Cuba legalized free circulation of the dollar. Then in 1995, Havana created the "convertible peso" to fill the gap between supply and demand for greenbacks on the island, a mechanism that until now funneled some -- but not all -- local greenbacks into government hands.
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