This is how the informal currency exchange is in Cuba today.

Have the currencies in the informal market reacted after the massive blackout and Hurricane Oscar?

Current Events
CiberCuba Writing

October 22, 2024 - 10:26 AM (GMT-5) |

Have the currencies reacted in the informal market after the massive blackout and Hurricane Oscar? The answer is no.

The prices of the three reference currencies in Cuba have not shown any changes in recent days, according to the values published today by the independent media elTOQUE based on the monitoring of the fluctuations of dollars, euros, and freely convertible currency (MLC) in purchase and sale announcements published on social media.

At 10:00 a.m. on this October 22, the dollar is still valued at 325 and the euro at 340 CUP.

In the case of the Freely Convertible Currency (MLC), it remains at 265 CUP, a price it has maintained since October 9, when it suddenly dropped by five pesos.

Although such stagnation is perfectly understandable given the limited connectivity of the population in recent days, in reality, the currencies had already entered a new period of stability beforehand.

After giving signs in early October of some movements, the currencies entered a period of calm from October 12, the date when the dollar rose to 325 CUP.

In the last 10 days, the exchange rate has neither risen nor fallen in price, according to the monitoring conducted by elTOQUE of the values.

Exchange rate today 10/22/2024 - 10:15 a.m. in Cuba:

Exchange rate of the Dollar USD to CUP according to elTOQUE: 325 CUP.

Exchange rate of the Euro EUR to CUP according to elTOQUE: 340 CUP.

Exchange rate of MLC to CUP according to EL TOQUE: 265 CUP.

The median values published today by elTOQUE also do not indicate that the currencies will undergo changes in the last hours.

Median values of buying and selling of the three reference currencies in the informal Cuban market (elToque)

Meanwhile, the debate over whether the exchange rate of currencies in the Cuban informal market should rise or fall is a constant presence on social media and reflects the interests and realities of different sectors in Cuban society.

Reasons why some want the price of currencies to rise:

Remittances and purchasing power: Those who receive remittances from abroad, whether in dollars or euros, benefit from a higher exchange rate, as they can convert those dollars into more Cuban pesos. This allows them to increase their purchasing power in an economy where prices, especially in the informal market, are high.

Investments and private businesses: Many self-employed individuals and entrepreneurs depend on the informal currency market to acquire dollars and euros, which are necessary to import products or access international markets. A high exchange rate can attract more foreign currency to the country and encourage investments, although it also increases operating costs.

Speculation and quick profits: Some people in the informal currency market act as speculators, buying and selling dollars with the intention of making quick profits as the value of the currency fluctuates. If the dollar rises, those who have accumulated dollars can sell them at higher prices and achieve significant gains.

Reasons why others prefer that currencies decrease or remain stable:

Inflation and the rising cost of living: When the price of the dollar in the informal market goes up, the prices of imported products and many goods in the Cuban market also increase. This affects the majority of Cubans who do not have access to dollars or remittances, making the cost of living increasingly high and difficult to sustain with salaries in Cuban pesos.

Impact on state-owned enterprises: The Cuban government and state-owned enterprises operating in Cuban pesos have difficulties accessing foreign currencies at reasonable prices when the exchange rate in the informal market is high. This can hinder the import of essential products or the supply of stores in MLC, exacerbating the shortage of basic goods.

Increase in social inequality: A more expensive dollar in the informal market benefits those with access to foreign currency, primarily families with ties abroad or who receive remittances, while exacerbating the difficulties of the majority of Cubans who rely solely on their income in Cuban pesos. This deepens economic inequality.

Pressure on salaries in pesos: In an economy where the price of the dollar continues to rise, salaries in Cuban pesos are losing value quickly. This reduces the purchasing power of the majority of the population that depends on state salaries, affecting their quality of life.