Castro bans US dollar, asks for Euros

Recovered from his accident, the Cuban leader announced a decree to stop the circulation of the US national currency within the territory of the Island. He also asked Cubans to tell relatives abroad to send euros, British sterling or Swiss francs instead.

In a decision aimed to response to George W. Bush’s tighter sanctions, Cuba’s President Fidel Castro announced the end of the circulation of the US dollar within the territory of the Island acting from November 8. In an aired TV statement, which shown Castro in public for the first time since undergoing surgery for his knee after a fall last week, a Cuban official said all cash purchases must be made using convertible pesos – local currency- since that date.

"Beginning on Nov. 8, the convertible peso will begin to circulate in substitution of the [U.S.] dollar throughout the national territory," reads the decree. However, restrictions will not extend to other foreign hard currencies as the Euro, the British Sterling or the Swiss franc.

According to the Central Bank decision, US dollars holding will still be legal, but using them in commercial transactions will be banned. Starting November 8, Cubans will have to use the so-called "convertible peso," a local currency pegged in value to equal the dollar on the island but with no value internationally.

Cuba made the U.S. dollar legal tender in the communist country following the fall of the Soviet Union in 1993. Cubans and tourists wishing to exchange American dollars will have to pay a 10 per cent commission charge.

The Central Bank of Cuba said the decision came as a response to an order of US President George W. Bush to restrict the wiring of money to the Island. "It is important to denounce the schemes of the (American) empire" against Cuba, Castro said in televised remarks, slamming the four-decade US embargo on the island.

According to available information, Cuban relatives in the US wire to the Island as much as $1 billion a year to aid their families.