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Posted June 05, 2009 by publisher in Business In Cuba

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The head of Cuba’s central bank has resigned as President Raul Castro pushes ahead with a government reorganization amid signs of a cash crunch, state television reported Thursday.

Francisco Soberon, 64, has been replaced by Ernesto Medina, who heads Banco Financiero Internacional, one of Cuba’s biggest banks, according to an official announcement read on the evening news. It did not say when the move had taken effect.

Soberon, who led the bank for nearly 15 years, also asked to be removed from the Cuban Communist Party’s policy-making Central Committee and as a parliament deputy, it said.

The statement offered no explanation for his resignation, but recent restrictions placed on large cash withdrawals suggest a liquidity problem on the island.

Soberon is known for carrying out the monetary policies of Castro’s older brother, Fidel, who resigned from the presidency last year because of health problems.

In recent years, he oversaw the introduction of the Cuban convertible peso, which replaced the U.S. dollar as Cuba’s legal tender. The peso’s value is tied to a basket of foreign currencies, including the dollar and the euro.

Cuban Foreign Minister Felipe Perez Roque and Vice President Carlos Lage were removed from the Cabinet in a stunning shake up in March. At the time, state media published letters that both men had written to Raul Castro, acknowledging they had committed errors and promising to continue to serve the country.

Since then, several other Cabinet members have also lost their jobs as a large scale streamlining effort fused ministries that were deemed to have similar, overlapping tasks.

  1. Follow up post #1 added on June 05, 2009 by publisher with 3905 total posts

    Was he too seduced by the “honey of power”?

    All is well in Cuba or is this another sign that politically and financially it is imploding?

    Even with good credit it is hard to find funds. Since Cuba has something like a C++ rating, I doubt any business or country is extending them any credit.

    Now if it weren’t for that darned Embargo, Cuba would be a wealthy country. Right Fidel?

    Cuba consulting services

  2. Follow up post #2 added on June 05, 2009 by publisher with 3905 total posts

    Thinking about this a bit more and I have to say that the resignation of the head of the Cuba central banking system cannot be good for financial confidence towards Cuba.

    Soberon was the head of the central bank for 15 years.

    Imagine if Alan Greenspan just resigned after 15 years with no explanation.

    A simple reorganization by Raul or are we watching the financial implosion of Cuba?

    What country is in a position to simply give Cuba “credit” without a reasonable guarantee of getting the money back?

    Maybe China but they are in Cuba for business, not for political ideology.

    Maybe Venezuela but that’s not a lot of money and really just discounted oil prices.

    Spain? Vietnam? Dubai?

    They are all in Cuba for business too.

    There is no Russia this time which was in Cuba for political reasons.

    Who will save Cuba this time?

    It does not appear to be Raul… not so long as Fidel can say whatever he wants and have control from the back office.

    Is Cuba dead in the water?

    Cuba consulting services

  3. Follow up post #3 added on June 05, 2009 by grant with 48 total posts

    Canada/Cuba trade(two way) is 1.6 billion a year. Credit can mean only that bank dradts are provided for payment when goods are delivered to Cuba. With all the lawsuits, Cuba will not take delivery with goods still in the USA.

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