The informal currency market in Cuba has seen a new increase in the price of the Free Convertible Currency (MLC), which rose to 275 CUP this Monday, five pesos more compared to Sunday.
This increase occurs in a context where the upward trend of the MLC remains despite the reduction of stores that accept this currency.
Meanwhile, the US dollar remains at 340 CUP, and the euro continues to be priced at 345 CUP, unchanged from the previous day, according to the reference rate from elTOQUE.
Exchange rate in Cuba Monday, February 24, 2025 - 05:00
- Dollar (USD): 340 CUP (unchanged)
Exchange Rate Evolution
- Euro (EUR): 345 CUP (unchanged)
- Freely Convertible Currency (MLC): 275 CUP (+5 CUP)
Why is the MLC still rising in Cuba?
The increase of MLC in the informal market may seem contradictory, as in recent months the government has implemented a process of partial dollarization, converting several stores that previously operated in MLC into establishments that now only accept cash dollars or international cards.
However, several factors could explain this increase:
1. Shortage of products in state-owned stores
Although many stores have stopped operating in MLC, others still do and continue to be a key point for purchasing essential goods such as cigarettes, eggs, yogurts, sausages, detergent, and soap.
The scarcity of these products has led to an increase in the demand for MLC to acquire them and resell them in Cuban pesos with high profit margins.
2. Resale strategies
Many Cubans use the MLC to purchase products in official stores and resell them in CUP at higher prices. This is due to the high demand and the lack of alternatives to obtain these goods in the formal economy.
3. Market Correction
According to economist Pavel Vidal, this increase could be a "temporary adjustment" following the sharp decline of the MLC at the beginning of the year. He explained that it is normal to see fluctuations of this kind in markets with price rigidity and a lack of liquidity.
4. Economic uncertainty
The ongoing economic crisis and the lack of access to foreign currency through official channels lead many Cubans to prefer securing their purchasing power through the informal market, driving up demand for MLC.
The future of the currency exchange market in Cuba
Despite the recent upturn, the long-term trend remains uncertain. While the dollar and the euro remain stable, the MLC could continue to rise in the short term if the demand for essential goods keeps putting pressure on the market.
However, the progressive dollarization of the economy and the elimination of stores in MLC could signal a decline of this currency in the medium and long term.
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