HAVANA, Oct. 28 (Xinhua) -- Cuba on Monday opened a chain of stores that sell household goods for U.S. dollars and other foreign currencies, in a bid to expand its foreign reserves.
The Cuban government hopes the strategy can help prevent capital flight by allowing Cubans to spend foreign currencies domestically, instead of spending them abroad.
The capital Havana has 12 branches of the first 13 retail shops and the eastern city of Santiago de Cuba has one. A total of 77 will be spread across the country, Cuban state daily Granma has reported.
The shops carry major household appliances, such as refrigerators, washing machines and large-screen TVs, as well as electric motorcycles and car components, among others.
Customers need to set up a dollar account and have a kind of debit card to make purchases, according to Granma.
The foreign currency accounts have no minimum balance requirement and accept deposits of a range of foreign currencies, including U.S. dollars, Canadian dollars, euros, British pounds, Swiss francs, Mexican pesos, Danish krone, Norwegian krone, Swedish krona and Japanese yen.
Although many Cuban people residing abroad usually send remittances back, their relatives at home only use the money to buy goods overseas, leading to capital outflow.
"The money that is leaving to acquire these products is estimated to be significant and we must capture it as a source of foreign exchange to spur our industry and replenish our chain stores," Cuban Vice President Salvador Valdes said last week, when announcing the new measure.
The opening of the stores will be a "gradual and orderly process," Valdes said, adding that part of the currencies collected via the stores will be used in the "restocking of the markets" in the island, Cuban media reported.
According to Western Union, a U.S. worldwide financial services and communications company, 62 percent of Cubans receive remittances from abroad through the company's network with more than 400 offices around the island.
Data from the Miami-based Havana Consulting Group showed that Cuba received 29 billion U.S. dollars in remittances from 2008 to 2018.
However, this flow may be affected by a recent U.S. sanction that limits remittances to Cuba to no more than 1,000 U.S. dollars every three months.
Marina Torres, vice president of Cuba's Metropolitan Bank, said that some 10,000 people had already opened accounts, and 13 percent had made cash deposits.
Gladys Hernandez, an economist with the Havana-based Center for Research on the World Economy, said the chain of shops should not be seen as a sign of the dollarization of the economy, because that is not the goal.
The goal, she said, is to prevent foreign currencies from leaving Cuba and invest them into the domestic market.
Stepped-up U.S. sanctions have choked off Cuba's international trade ties and access to foreign currencies.
