The Cuban peso continues to lose value at an accelerated pace, impacted by inflation, scarcity, and an increasingly dollarized economy. This Tuesday, the informal market hit a new milestone: the dollar reached 400 CUP and the euro 450 CUP, record figures that confirm the deterioration of the national currency.
Meanwhile, the Freely Convertible Currency (MLC) continues to plummet, with a rate of just 205 CUP, very close to breaking the floor of 200. The depreciation of the MLC is partly explained by the conversion of more and more state stores to sales in dollars, leaving this intermediate currency with less practical utility for the population.
The situation reflects a growing dollarization: the dollar and the euro are establishing themselves as strong currencies for private imports, travel, savings, and shopping in a state market that is reducing its supply in pesos and MLC. Without access to these currencies, millions of Cubans are seeing their purchasing power collapse; some pensioners barely receive the equivalent of three or four euros per month, while the prices of food and essential services continue to rise.
The combination of inflation, productive decline, and currency restrictions exacerbates the inequality between those who receive remittances or have earnings in foreign currency, and those who depend solely on state salaries in Cuban pesos. For many, the national currency has become a symbol of loss of value and trust, while the country moves, de facto, towards an economic scheme sustained by foreign currencies.
Frequently Asked Questions about the Monetary Crisis in Cuba
Why is the Cuban peso continuing to lose value against the dollar and the euro?
The Cuban peso is devalued due to inflation, scarcity, and a dollarized economy. The increasing demand for strong currencies such as the dollar and the euro for imports, savings, and purchases in a dollarized state market contributes to the deterioration of the national currency.
How does the devaluation of the Cuban peso affect the population?
The devaluation of the Cuban peso diminishes the purchasing power of the population, especially for those who rely on state salaries and do not have access to foreign currencies. This makes basic products and essential services more expensive, increasing economic inequality.
What is the Freely Convertible Currency (MLC) and why is it losing value?
The Freely Convertible Currency (MLC) is a currency used in state-owned stores in Cuba. Its value has plummeted due to the conversion of stores to dollar sales, lack of physical backing in foreign currency, and shortages in stores that operate with MLC, reducing its practical utility.
What measures is the Cuban government taking to address the monetary crisis?
The Cuban government has announced changes to the official currency market, but these reforms have yet to generate trust or stability. The absence of a reliable official exchange rate and corresponding salaries remains a significant obstacle.
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