The independent medium elTOQUE has raised a crucial question for the Cuban domestic economy: What is the immediate fate of the freely convertible currency (MLC)?
Through its Observatory of Currencies and Finances of Cuba (OMFi), the outlet has analyzed the signals, economic indicators, and growing rumors about a possible disappearance or transformation of the controversial virtual currency.
Since late 2024, rumors regarding the "possible" elimination of the MLC have been circulating strongly among Cubans.
Although authorities have assured that retail establishments and other services will continue to operate in this currency, the truth is that the increase in stores that operate exclusively in dollars has raised alarm.
elTOQUE warns that this process has caused "some panic among many people who have witnessed the depreciation in their accounts of the so-called banking dollar."
The MLC in decline: Signs from the informal market
According to reports from OMFi, while partial dollarization has brought benefits to certain sectors, it has also exacerbated inequality.
"Partial dollarization provides liquidity and financial stability to certain sectors and markets, but it also creates segmentation and greater inequality," the analysis notes.
This trend has led to an increased demand for strong currencies such as the dollar and the euro, and has contributed to the depreciation of the MLC.
"The lower interest in obtaining and purchasing MLC and Cuban pesos is causing their demand in the informal exchange market to decrease, which contributes to their continued depreciation," warns the OMFi.
Even those who receive payments in MLC have been affected.
According to the Observatory, during March 2025, the MLC lost 3.5% of its value against the Cuban peso and 7.6% against the dollar.
Behavioral Change: From Saving to Letting Go
This context has led to a change in the economic behavior of the population.
elTOQUE reports that, after a period marked by intense purchases of MLC to gain pricing advantages on products such as cigars, now "the number of people wanting to get rid of MLC or sell it at the current market price has increased."
The devaluation of this currency has transformed what was once a valuable asset into a less reliable resource, especially as access to dollar stores has expanded for those receiving remittances or holding foreign currency.
Forecasts for April 2025
elTOQUE, through the OMFi, has produced specific forecasts for the behavior of currencies in the informal market during April.
A valuation increase of the dollar and euro is expected to be between 2.5% and 4.8%, while the MLC could continue to drop to levels of 262 – 255 CUP for 1 MLC.
Instead, the dollar is estimated to be between 364 and 372 CUP, and the euro between 370 and 377 CUP.
These calculations reflect the growing pressure on the MLC, whose purchasing power is being eroded by inflation and the market's preference for hard currencies.
Does it disappear or transform?
Despite the rumors and depreciation, elTOQUE's analysis nuances the idea of an immediate disappearance of the MLC.
"The existence of stores in MLC - some even with an increased supply of local products in recent days - suggests that, for now, the MLC is not going to disappear," the report notes.
Nonetheless, the OMFi's recommendation is clear: "maintain savings in foreign currency" as a key strategy to protect the value of money against the ongoing rise in the cost of goods and services.
External factors and internal uncertainties
The analysis of elTOQUE does not stop at the internal dynamics.
It also warns that certain international factors—such as a potential trade war driven by the Trump Administration—could introduce additional pressures on the Cuban economy, although “in the current domestic crisis, other factors such as sanctions, internal inefficiencies, and the dysfunctions of the state-controlled model will continue to be more decisive.”
Internal inflation, while lower in year-on-year terms, remains high.
The analysis indicates that this has led to a decrease in the purchasing power of wages and pensions, pushing more families into situations of poverty.
At the same time, most of the dollar offerings—accessible only to those receiving remittances or holding foreign currency—exclude many Cubans from the formal consumption system.
Projections subject to political changes
Finally, the OMFi emphasizes that its forecasting models are conditioned by potential changes in the economic policy of the Cuban government and by the evolution of U.S. sanctions.
"The forecasts are subject to the implementation of new measures and regulations related to the transformations that the Cuban government aims to apply," the report warns.
A change in the sanctions policy or new reforms in the monetary system could introduce even greater volatility in the coming months.
The economic landscape described by elTOQUE and the OMFi shows that the MLC, far from vanishing immediately, is continuing a slow process of depreciation and loss of relevance. Its future will depend on both internal decisions and external pressures.
Meanwhile, Cubans continue to navigate an increasingly dollarized system, where inequality and uncertainty dictate the rhythm of everyday life.
Frequently Asked Questions about the Freely Convertible Currency (MLC) in Cuba
What is the future of the MLC in Cuba?
The future of the MLC in Cuba is uncertain, as although the authorities assure that stores operating in this currency will remain, the trend towards dollarization and the depreciation of the MLC suggest that it could disappear or transform in the long term.
Why is the MLC being devalued?
The MLC is depreciating due to lower demand in the informal exchange market and the preference for stronger currencies such as the dollar and the euro. This is exacerbated by the partial dollarization of the Cuban economy, which has increased inequality and reduced interest in the MLC.
What effects does partial dollarization have in Cuba?
The partial dollarization in Cuba has provided fluidity and financial stability to certain sectors, but it has also increased inequality. Access to products and services in dollars excludes those without access to foreign currency, thereby widening the economic gap.
What forecasts are there regarding the value of the MLC and other currencies?
According to the Observatory of Currencies and Finances of Cuba (OMFi), the dollar and the euro are expected to continue appreciating between 2.5% and 4.8%, while the MLC could keep falling to levels of 262 – 255 CUP per 1 MLC, reflecting the increasing pressure on this currency.
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