Another day of decline in dollars and euros in Cuba's informal currency market.

The US currency has been experiencing 18 consecutive days of rapid and abrupt decline in its value, during which it has lost more than 100 pesos.

Imagen de referencia © CiberCuba
Reference imagePhoto © CiberCuba

The fall in the price of currencies in the informal market does not stop in Cuba, and this Sunday the quotes for dollars and euros mark a new decline.

The US currency has experienced 18 consecutive days of rapid and abrupt depreciation of its value, during which it has accumulated over 100 pesos in losses, confirming an unprecedented pace of decline since elTOQUE began documenting price fluctuations in the informal sale of foreign currencies on the island.

If the day before the dollar was down 5 points and was quoted at 290 Cuban pesos (CUP), this Sunday the greenback falls 8 points compared to the previous day and is quoted at 282 Cuban pesos.

A five-point drop was recorded again in the case of the European currency. This Sunday, the euro, which was trading at 300 CUP yesterday, starts the day at a price of 295 CUP. Indifferent to what is happening around it, the freely convertible currency (MLC) maintains the previous day's exchange rate of 260 pesos.

Exchange rate today 02/06/2024 - 6:22 am in Cuba:

  • Dollar exchange rateUSD to CUPaccording toThe TOUCHTranslate the following text to English:282 CUP
  • Euro exchange rateEUR to CUPaccording toelTOQUETranslate the following text to English:295 CUP
  • Exchange rate ofMLC to CUPaccording toelToqueTranslate the following text to English.260 Cuban pesos

Alternative exchange rate from other platforms:

  • Dollar exchange rate (USD): Buying 278 CUP, Selling 288 CUP
  • Euro exchange rate (EUR): Buying 288 CUP, Selling 296 CUP.
  • Exchange rate of the MLC: Buying 250 CUP, Selling 258 CUP

The informal exchange rate of Cuba offered here is not officially recognized or supported by any financial or governmental entity.

Without a parachute: Currencies experience a vertiginous descent in Cuba.

Recently, the independent media outlet elTOQUE, which has been documenting the ups and downs of the prices of reference currencies in Cuba's informal market since 2019, shared its opinion on the sharp decline in the value of dollars, euros, and MLC.

The announcement of the reestablishment of remittance services to the island through Western Union (on May 9) and the proximity to a fixed rate (400 CUP x 1 USD) could have influenced expectations, the so-called 'market sentiment'," economist Pavel Vidal Alejandro noted in an extensive article on the topic.

The economist pointed out that there has been a "new balance in the consensus and the attitude of market participants."

That is to say, "an increasing number of people began to consider that the price of currencies was excessively high and chose to sell before a possible drop," which triggered the supply.

Vidal Alejandro stated that since mid-May - coinciding with the beginning of the fall of the three reference currencies - there has been a notable increase in the supply of foreign currency in the monitored sample in virtual spaces.

On the other hand, the aforementioned media pointed out that it is natural for "temporary corrections to occur after an extended bullish period in the market."

He explained that since 2022, there have been six pronounced and consecutive falls in the values of currencies, which have lasted for weeks in some cases, but then have recovered.

Is the Cuban peso really appreciating these days?

Vidal Alejandro considered that the fundamental factors explaining the internal and external imbalances of the Cuban economy have not changed, and therefore "the current inflection in the rate should not be associated with a change in trend."

Over the past four years, the value of the Cuban peso has shown a persistent trend towards depreciation, which is consistent with the high fiscal deficit, excessive issuance of Cuban pesos, contraction of national production and exports, increasing dependence on imported products and supplies, dollarization, emigration, and widespread and persistent inflation in the markets. In other words, the crisis continues, and there is no reason for the peso to change its trend towards devaluation.

And there's more, the growth of tourism has slowed down, exports of goods fell below expectations, and the sugar harvest still fails to stabilize production. As if that weren't enough, by the end of February this year, the State budget imbalance accumulated over 20,000 million pesos.

On the other hand, the Cuban economist Emilio Morales stated this week in an interview given to CiberCuba that it is "impossible" for the Cuban peso to have revalued by itself, gaining ground against the dollar, as has happened in recent days, and attributed the fall in the informal exchange rate of currencies to maneuvers by the cyber brigades of the UCI (University of Computer Sciences) on the island.

According to Morales, the only news that can revalue the currency on its own is "the government fell," because this would finally open up hope for a change in the system.

Morales also ruled out that the decrease in the price of dollars, euros, and MLC in Cuba is due to a supposed injection of foreign currency in the informal market.

"Where are they going to get the foreign currency from if they have power outages every day because they can't afford to buy oil? It would have to be a multimillion-dollar injection and they don't have it," he questioned.

In response to the question of whether there can be any mechanism other than the intervention of clarias to control inflation this week, the economist responded emphatically.

"That's a lie. Cuba doesn't produce. Where is the production support for that to happen? It will probably regain its course and surpass the 400 pesos barrier," he asserted.

What do you think?


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