The drop in the value of the euro in the informal Cuban market has surprised the population, following several months of stable exchange rates for the European currency.
According to data provided by the independent platform elToque, which monitors foreign currencies on the Island, the euro reaches a value of 335 Cuban pesos (CUP) this Sunday, representing a decrease of five pesos from the exchange rate it has maintained for months.
Exchange rate today 12/15/2024 - 11:48 AM in Cuba:
Exchange rate of the USD to CUP according to elTOQUE: 325 CUP
Exchange rate of the euro (EUR) to CUP according to elTOQUE: 335 CUP
Exchange rate of MLC to CUP according to TOQUE: 270 CUP
The volatility of this unregulated market continues to be a constant in the exchange rates of currencies in Cuba. For instance, on Saturday, the value of the dollar dropped by two pesos to settle at 325 pesos. This Sunday, it maintains that value.
For its part, the Freely Convertible Currency (MLC) maintains its price from a few days ago: 270 CUP.
Due to the time of year, some factors affecting the decline of the euro may be due to an increase in the supply of this currency from individuals.
Amid the crisis, those receiving remittances from Europe or who have returned from trips abroad may be selling their euros to obtain Cuban pesos and meet their most pressing needs. This has created an imbalance between supply and demand in the informal market, affecting prices.
The Cuban economy is currently experiencing one of the most critical moments in its recent history, with high levels of inflation and chronic shortages in state-run markets.
Recently, the leader Miguel Díaz-Canel acknowledged that 2024 has been a very tough year in which "we are practically living day by day."
This decline in currency prices continues to create expectations among many families, for whom the informal market has become the primary means to acquire currencies like the euro or the dollar. These currencies are essential for purchasing food, medicines, and other products that are only available in stores operating in freely convertible currency (MLC).
Meanwhile, experts warn that the volatility of the informal market is a reflection of the deep imbalances in the national economy. Without structural reforms and greater economic openness, it is unlikely that this situation will improve, leaving Cubans trapped in a cycle of scarcity and precariousness that seems never-ending.
"The worsening of the economic crisis in 2024 has had a paralyzing effect on the informal foreign exchange market. The reduced number of tourists, imports, and, in general, the decline in economic activity across all sectors have resulted in a contraction of both the supply and demand for foreign currency," stated Cuban economist Pavel Vidal, who is based in Colombia, a few days ago.
Frequently Asked Questions about the Euro's Decline in the Cuban Informal Market
Why has the euro decreased in the informal market in Cuba?
The decline of the euro in the Cuban informal market is mainly due to an increase in the supply of this currency. Many Cubans receiving remittances from Europe or who have returned from trips abroad are selling their euros to obtain Cuban pesos and meet their basic needs, creating an imbalance between supply and demand.
What is the current exchange rate of the euro in Cuba?
The exchange rate of the euro in the Cuban informal market is 335 Cuban pesos (CUP), which represents a decrease of five pesos compared to previous weeks. This value reflects the ongoing volatility of the informal market in response to the country's economic imbalances.
How does the current economic situation affect the foreign exchange market in Cuba?
The Cuban economy is experiencing a severe crisis, marked by high inflation and scarcity in state markets. This situation impacts the foreign exchange market by reducing the supply and demand for foreign currencies, leading to volatility in their values. Without structural reforms, it is unlikely that this situation will improve, leaving Cubans trapped in a cycle of scarcity and precariousness.
What role does the informal currency market play in the Cuban economy?
The informal currency market has become the main means for many Cuban families to acquire foreign currency such as euros or dollars, which are essential for purchasing food, medicine, and other products that are only available in stores operating in freely convertible currency (MLC). The volatility of this market reflects the deep economic imbalances in the country.
Filed under:
