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The Central Bank of Cuba (BCC) itself acknowledged this Wednesday that the new official exchange rate “is not what many expected,” referring to the relaunch of the exchange market that came into effect on December 18 and sets the dollar at 410 Cuban pesos (CUP) and the euro at 481.42 CUP.
The admission was made by Ian Pedro Carbonell, director of Macroeconomic Policies at the BCC, in statements to the official media Cubadebate, where he asserted that the measure aims to "organize foreign currency flows and establish a transparent and legal official market," although he acknowledged that the new scheme will not immediately eliminate the informal market.
The redesign of the exchange system is part of the so-called Macroeconomic Stabilization Program promoted by the regime, which introduces three segments with different official rates. According to Carbonell, the new model “responds to the real conditions of the economy,” characterized by a decline in GDP, a shortage of foreign currency, and a persistent fiscal deficit. However, the measure comes late and with limited scope, in a country where the population has been calculating the value of the Cuban peso according to the informal market for years.
Far from correcting distortions, the official exchange rate is approaching the street price, effectively validating the value that the parallel market has imposed for years. The independent medium elTOQUE reports today the dollar at 440 CUP and the euro at 480 CUP, figures that are practically identical to those published by the Central Bank and CADECA. This unusual convergence reveals that the government has failed to impose a realistic exchange rate without resorting to the reference of the underground economy. The "new floating exchange market" does not combat informality: it assimilates and formalizes it under state control.
The president of the Central Bank, Juana Lilia Delgado, announced the measure during a televised appearance where she presented the new three-segment scheme and defended the introduction of a floating exchange rate “to restore the purchasing power of the Cuban peso.” However, the results reveal a different reality: the official rate is almost on par with the informal market, which implies an implicit acknowledgment of the failure of the previous exchange rate policy.
With the new exchange rate of 410 pesos per dollar, the national average salary, set at 6,685.3 CUP, amounts to just 16.30 dollars per month, a negligible increase compared to the previous scenario. The minimum wage, at 2,100 CUP, equals 5.12 dollars at the official rate and 4.77 at the informal rate, placing it among the lowest in Latin America. The average salary in Cuba, for its part, increases by just one dollar following the implementation of the new rate, while prices for food, medicines, and basic goods continue to be expressed in Freely Convertible Currency (MLC), which is inaccessible for most Cubans.
The economist Javier Pérez Capdevila recently estimated that living in Cuba costs over 50,000 pesos per month, about eight times the average salary. “Working in Cuba does not sustain life with dignity,” he wrote on his social media, recalling that the minimum wage “does not even cover one-tenth of the basic needs of an average family.”
The Central Bank has insisted that the floating rate will be adjusted periodically and even daily, depending on market conditions, but it has not explained how it will ensure the necessary foreign currency supply to sustain the system. For now, the institution itself admits that the new market "will only sell what it buys," meaning it will rely on attracting dollars through exports, remittances, and sales by CADECA.
The result is a framework that does not restore confidence in the Cuban peso nor changes the reality of an economy that remains effectively dollarized. For the majority of Cubans, the peso continues to lose value every day, and the true exchange rate continues to be set on the street.
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