Cuba announced it would prohibit the use of US dollars in commercial transactions starting 8 November 2004, replacing them with the domestic convertible peso, which trades at parity with the dollar inside Cuba but holds no value internationally. President Fidel Castro, making his first public appearance after fracturing an arm and a leg in a fall, framed the measure as retaliation for US restrictions on remittances sent to the island.
Analysts said the real driver was financial pressure. Cuba spends hard currency on imported oil and food, and removing dollars from everyday circulation would channel foreign cash directly to the government. Experts noted China and Venezuela had been providing substantial financial support, and Cuban debt to Venezuela may exceed one billion dollars.
The timing drew attention. The ban takes effect just after the 2 November US presidential election, leading observers to suggest Havana was positioning itself to benefit from a possible change in Washington's Cuba policy.
A 10 percent conversion fee on dollar exchanges raised concerns that many Cubans would resist converting savings, potentially reviving black-market currency activity. Cubans receive more than 800 million dollars annually in remittances, and tourism generates roughly two billion dollars in hard-currency revenue. The US State Department called the move confiscatory and said it reflected the effectiveness of existing American pressure on the Castro government.
Historical summary. TurkishPress restated this AFP wire report, first published in October 2004, in its own words.