The value of foreign currencies in the Cuban informal market continues to plummet following the regime's announcement to establish a more flexible official exchange rate over the coming months, one that will respond to the supply and demand dynamics of the market.
In recent hours, the dollar and the euro, two of the three reference currencies for street trading in Cuba, have continued to decline.
At dawn on this Tuesday, the dollar is trading at 305 CUP, five pesos less than the previous day.
The euro also dropped by five units, falling to 315 CUP.
At the moment, on this December 24th, only the Freely Convertible Currency (MLC) remains unchanged, at 260 pesos.
In an article published this Tuesday by elToque, the independent media outlet did not directly link the decline in currency values—and the subsequent reevaluation of the national currency—with the announcement of an upcoming floating official exchange rate.
"It could coincide, as in previous occasions, with the arrival of residents abroad who come to celebrate the New Year with their families. The arrival of emigrants to the island means an increase in the circulation of foreign currency and, therefore, a greater supply," the cited source indicated.
"However, economists warn that this type of appreciation is temporary and does not reflect a structural improvement in the economy," they added.
Exchange rate today 12/24/2024 - 7:56 a.m. in Cuba:
The exchange rate of the USD to CUP according to elTOQUE: 305 CUP.
Exchange rate of the euro EUR to CUP according to TOQUE: 315 CUP.
Exchange rate of MLC to CUP according to TOQUE: 260 CUP.
Expectations regarding the "floating exchange rate"
The Cuban government announced last Wednesday that it will establish a floating official exchange rate, adjusted to supply and demand, in an attempt to compete with the informal market.
The rate, the details and effective date of which are unknown, aims to regulate the currency market in a context where the informal foreign exchange market has so far been dominant.
This measure is part of a partial dollarization of the economy, which will impact strategic sectors such as wholesale and retail trade, tourism, and foreign commerce. Additionally, the use of cash in dollars will be allowed in sectors such as pharmacies, airports, and exporting agricultural producers.
In an economic context marked by inflation and the failure of previous economic policies, the regime is once again trying to regain control of a landscape where the rules of the informal market largely define the economic reality for the population.
Equivalents of each available euro and US dollar bill to Cuban pesos (CUP)
United States Dollar (USD) to Cuban Peso (CUP), according to the exchange rates on this December 24th:
1 USD: 305 CUP.
5 USD: 1,525 CUP.
10 USD: 3,050 CUP.
20 USD: 6,100 CUP.
50 USD: 15,250 CUP.
100 USD: 30,500 CUP.
Euros (315 CUP for each euro):
1 EUR: 315 CUP.
5 EUR: 1,575 CUP.
10 EUR: 3,150 CUP.
20 EUR: 6,300 CUP.
50 EUR: 15,750 CUP.
100 EUR: 31,500 CUP.
Frequently Asked Questions about the Currency Collapse in Cuba
Why are currency prices falling in Cuba?
The prices of foreign currencies are falling in Cuba due to the government's announcement of a more flexible official exchange rate that will adjust according to market supply and demand. This move aims to compete with the informal market and reduce the disparity in currency value.
What is the floating exchange rate announced by the Cuban government?
The floating exchange rate is a mechanism that will adjust the official exchange rate according to market supply and demand. This measure aims to regulate the currency market, and specific details, as well as the effective date, have not yet been announced.
How does the decline of currencies affect the average Cuban?
The decline of the currency severely impacts the purchasing power of the average Cuban, as inflation and the shortage of currency limit their buying capacity. The population often turns to the informal market to obtain basic goods, which exacerbates their daily economic hardships.
What is the current value of currencies in the Cuban informal market?
The current value of the dollar in the Cuban informal market is 305 CUP, while the euro is priced at 315 CUP, and the Convertible Currency (MLC) remains at 260 CUP. These values have been declining recently due to the expectations surrounding the new economic measures.
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