In an unexpected turn, the exchange rate of the Freely Convertible Currency (MLC) saw a significant increase in the informal currency market in Cuba, reaching 255 Cuban pesos (CUP) this Sunday, January 12, 2025.
This abrupt rise of 15 CUP in less than 24 hours places the MLC in a prominent position compared to previous weeks, marking a significant increase from the 240 CUP reported just two days ago, also raising questions about the scope and evolution of the “partial dollarization” process of the economy approved by the Cuban regime.
The phenomenon is not limited to the MLC. The euro, another highly sought-after currency in the informal market, also saw an increase, trading at 347.5 CUP (a rise of nearly 7 CUP compared to the previous day), while the US dollar remains around 340 CUP.
Exchange rate in Cuba Sunday, January 12, 2025 - 06:05
- Exchange rate of the dollar (USD) to Cuban pesos (CUP): 340 CUP
- Exchange rate of the euro (EUR) to Cuban pesos CUP: 347.5 CUP
- Exchange rate from (MLC) to Cuban pesos CUP: 255 CUP
These variations confirm the high volatility that characterizes the informal market on the island, reflecting the growing demand for foreign currencies among the population.
Exchange Rate Evolution
The rise of the MLC surprises analysts and citizens, who attribute this behavior to a combination of factors. Among them, the difficulties in accessing foreign currency in the official market and the increasing use of the MLC for everyday transactions in state-run stores stand out.
This is compounded by economic uncertainty, which drives many to seek refuge in more stable currencies in light of the persistent devaluation of the Cuban peso.
Since the beginning of the year, the informal market has shown a pattern of progressive increases in the prices of foreign currencies. At the beginning of January, the MLC was around 305 CUP, and the euro was close to 310 CUP. The increase in just a few days reflects a dynamic characterized by the imbalance between supply and demand in a context of financial restrictions.
The rise of MLC, along with the increase in the euro, reinforces the need for effective solutions to stabilize the currency market in Cuba. Meanwhile, citizens continue to face a complex situation, where access to foreign currency becomes increasingly costly and essential for daily survival.
In this context, the expectations regarding the upcoming movements in exchange rates continue to create significant uncertainty among Cubans.
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