“What happens when the bank runs out of money, Sancho?”

This is what Don Quixote would probably say if he were the owner of a Mipyme (small or medium sized business) or an economist for a Cuban state company.

The news is circulating everywhere. The Central Bank of Cuba (BCC) announced a package of measures that I will summarize:

  • State, private and non-agricultural cooperative companies will not be able to make withdrawals via ATMs of the cash necessary for their activity.
  • These sectors of the economy must act in accordance with “the conditions agreed upon with the bank and in correspondence with the operational and fiscal levels.”
  • All operations between economic actors must be carried out through existing means of payment (credit, etc.), not in cash.
  • “Collection and payment operations that exceed the figure of 5,000 Cuban pesos, are carried out through payment instruments and credit instruments other than cash, and priority is given when executed through electronic payment channels.”
  • Only natural persons may withdraw cash through ATMs.

“Cash operations have grown in greater proportion” than the use of digital channels for payments and transactions, said the BCC and identifies said growth as “a consequence of inflation and other factors.”

For his part, Cuban economist Pedro Monreal opined in this way in his blog El Estado: “The rapid growth of cash operations is not a ‘consequence’ of inflation. On the contrary, inflation can have various causes and excess currency is one of them. The widely accepted causality is that money ‘explains’ inflation.”

So there you go, and I return to the knight-errant who, by procuring, procures a vile cashier.

“Heck, my lord, ATMs are like windmills, when there’s no wind that blows…” Sancho tells the sad Knight, who adds: “And if it has broken blades, like this one, I doubt we’ll be able to pay for the next inn.”