Foreign investors and businesses in Cuba are getting worried as the state-run banks on the island explain that they have little foreign currency for withdrawals and international transfers. Could the country be near insolvency? On top of low nickel prices, the hurricanes at the end of 2008, and the current global economic downturn, declaring insolvency could be disastrous for the Cuban economy. If Cuba reveals that it is unable to pay its debts on time, it will only drive away foreign businesses and potential future investments—a negative feedback loop.
Cuban authorities have not made any public statement as to the severity of the situation, and indeed rarely comment on economic developments in the country. Now would be a good time to speak up, if businesses should not be worried.
Read the Reuters report here.
