The dollar and the euro have declined in their unofficial prices in Cuba following the government's announcement to establish a more flexible official exchange rate that responds to market supply and demand dynamics.
At 8:00 a.m. local time this Thursday, the average selling price of the dollar is at 322 CUP, three pesos less than its price the previous day.
The euro also declines, falling to 330 CUP, which is two units lower than this Wednesday.
At the moment, only the Freely Convertible Currency (MLC) remains unchanged, valued at 265 CUP, which was also its value on December 18.
The regime's announcement, the details and effective date of which are unknown, aims to regulate the currency market in a context where the informal foreign exchange market is dominant, establishing the real prices of goods consumed by the population.
Exchange rate today 12/19/2024 - 8:26 a.m. in Cuba:
Exchange rate of the dollar USD to CUP according to elTOQUE: 322 CUP.
Exchange rate of the euro EUR to CUP according to elTOQUE: 330 CUP.
Exchange rate of MLC to CUP according to TOQUE: 265 CUP.
The strategy to control the foreign exchange market
The Cuban government aims to establish a flexible official exchange rate, aligned with supply and demand, in an attempt to compete with the informal market, which dominates the real value of the Cuban peso.
This measure is part of a partial dollarization of the economy, which impacts strategic sectors such as wholesale and retail trade, tourism, and foreign commerce. It will also allow the use of cash dollars in sectors like pharmacies, airports, and exporting agricultural producers.
Despite the supposed monetary unification following the elimination of the CUC, the country operates with multiple currencies: the dollar, euro, MLC, and the depreciated Cuban peso. This reality reflects the regime's inability to meet the demand for foreign currency, leaving the informal market as the main price regulator.
Contradictorily, Marrero announced measures to "dedollarize" certain economic sectors, without specifying how they will be implemented. In an economic context marked by inflation and the failure of previous economic policies, the regime is trying to regain control of a landscape where the rules of the informal market largely define the economic reality for the population.
Equivalences of each available euro and US dollar bill to Cuban pesos (CUP)
U.S. Dollar (USD) to Cuban Peso (CUP), according to the exchange rates of December 19:
1 USD = 322 CUP.
5 USD = 1,610 CUP.
10 USD = 3,220 CUP.
20 USD = 6,440 CUP.
50 USD = 16,100 CUP.
100 USD = 32,200 CUP.
Euros (330 CUP for each euro):
1 EUR = 330 CUP.
5 EUR = 1,650 CUP.
10 EUR = 3,300 CUP.
20 EUR = 6,600 CUP.
50 EUR = 16,500 CUP.
100 EUR = 33,000 CUP.
Frequently Asked Questions about the Informal Currency Market in Cuba
How have the dollar and the euro reacted in the Cuban informal market following the new economic measures?
Following the announcement of a more flexible official exchange rate in Cuba, the dollar and euro have decreased in value in the informal market, now standing at 322 and 330 Cuban pesos (CUP) respectively. These fluctuations reflect the government's attempt to regulate the currency market, although details on the implementation of these measures have yet to be disclosed.
What does the Cuban government seek with the new official exchange rate?
The Cuban government aims to establish an official exchange rate that aligns with market supply and demand, in an effort to compete with the informal market that currently dictates the real value of the Cuban peso. This measure is part of an effort to control the foreign exchange market and mitigate the effects of the partial dollarization of the economy.
Why does the informal currency market remain relevant in Cuba?
The informal currency market in Cuba remains significant as it meets the demand for foreign currency that the government cannot fulfill, reflecting the real prices of goods and services on the island. The absence of effective measures to stabilize the exchange market has left the informal market as the primary regulator of prices.
What is the freely convertible currency (MLC) and what is its current value?
The Freely Convertible Currency (MLC) is a virtual currency used in specific stores in Cuba, and it currently remains stable at 265 Cuban pesos (CUP) in the informal market. The MLC is essential for accessing certain products, as the Cuban government uses it in its commercial operations.
What are the implications of the recent economic measures taken by the Cuban government?
The recent economic measures taken by the Cuban government, such as the establishment of a flexible exchange rate and the acceptance of cash foreign currency, aim to regain control over the foreign exchange market and reduce the influence of the informal market. However, these measures have faced criticism for their lack of clarity and potential contradictions with the country's economic reality, where inflation and a shortage of foreign currency continue to severely impact the population.
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