Cuban bank assets deposited in foreign financial institutions that belong to an international reporting system showed a stunning plunge of $1.55 billion, or 24 percent, in just the last three months of last year.
"It's highly unusual for those deposits to drop so much, especially because Cuba had been building up its liquidity until then," said Luis R. Luis, a former chief economist at the Organization of American States who first reported the change.
A Bank for International Settlements report dated June 4 showed Cuban bank deposits in the BIS's 43 member central banks and financial centers nosedived from $5.65 billion at the end of September to $4.1 billion at the end of December.
Luis, on the board of directors of the Association for the Study of the Cuban Economy, said that there are no confirmed reasons but lots of possibilities for both the growth of Cuban assets in BIS institutions until September, and their plunge afterwards.
The increase may have reflected Cuban efforts to grow or streamline its commercial trade with BIS member nations, he noted. A country's bank deposits abroad usually are used to pay for or guarantee import deals.
Luis added that with Venezuelan President Hugo Chavez, a generous Havana ally up for re-election and reportedly suffering from cancer, Cuban officials also may have been increasing their reserves "to protect themselves against a Venezuelan shock."
BIS reports showed that Cuban assets deposited in member institutions almost doubled from 2008 to the middle of 2011, to $5.8 billion, and surpassed Cuban debts to BIS members for the first time in about 10 years. The debt remained at about $1.7 billion during the same period. Most BIS members are in Western and developed countries.
More puzzling are the reasons for the 24 percent plunge in the last three months of 2011 recorded in the latest figures made public by BIS. Cuba has made no comment on the drop.
"We don't know exactly why this drop happened, but we can talk about several possibilities for why the money became invisible," Luis told McClatchy Newspapers. "And maybe there's something else that we don't know about."
The government may have shifted the money to financial institutions in countries like China and Venezuela, where the banks are not BIS members, the economist noted, in order to streamline its growing commercial trade with those countries.
Cuban ruler Raul Castro is now visiting China and Vietnam on one of his rare trips abroad since he succeeded brother Fidel.
Perhaps the island's government drew down on its foreign deposits to pay for imports of agricultural and other products, Luis added. Cuba has been importing an estimated $1.5 billion a year in agricultural products alone.
Cuba, which had large deposits in Spanish banks, also may have been scared by the euro crisis and moved out a large part of its assets. "But then why not put the money in other BIS banks, like Canadian banks?" Luis said.
Cuban officials also may have spent the assets to settle outstanding debts, Luis added, or turned them into gold in hopes of protecting themselves from global economic swings.
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