- The Washington Times - Thursday, October 25, 2001

HAVANA With its currency sliding and the crucial tourism industry in a free fall after the terrorist attacks on the United States, Cuba's already ailing economy has taken a dramatic turn for the worse.
The Cuban peso yesterday hit 26 to the U.S. dollar, its lowest level in almost five years. CADECA, the central bank-authorized currency exchange offices, last Friday closed with the peso trading for 23 to the greenback.
"The current situation is forcing the government to make some concessions where the peso's exchange rate is concerned," a Western diplomat based here said privately. "But it can't let [the rate drop] so dramatically that the population cannot bear it. In any case, it shows that the government is seriously short of dollars."
Indeed, while Cubans lined up at CADECA windows this week could sell dollars they typically receive from tourism-related work or relatives' remittances, they were stunned to learn they at least temporarily could no longer turn in pesos for U.S. currency.
The lone communist government in the Americas depends on hard currency to purchase foodstuffs, oil and goods it needs for the tourism industry, which in turn is its main hard-currency-earning enterprise, officially bringing in $2 billion last year.
And the slump in the peso comes as bad news for most of the island's workers who earn their salaries in pesos on average about $20 a month but then exchange pesos for dollars to buy imported goods sold in government-run stores but only for dollars, such as cooking oil, diapers or beef.
Lower remittances from Cubans living abroad have also hurt the peso.

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