The Central Bank of Cuba (BCC) publishes an official exchange rate that serves as a reference for the currency market, but banks, CADECA, and other financial institutions set their buying and selling rates by applying a commercial margin.
Hello generates visible differences for the population and fuels complaints on social media due to the gap between what the BCC announces and what is ultimately offered at the counter. Just this Saturday, the US dollar shows an eight pesos difference between the BCC rate (408 CUP) and the CADECA rate (416 CUP).
The explanation was provided on television by Iann Pedro Carbonell Karel, director of Macroeconomic Policies at the Central Bank, during a conversation with regime spokesperson Lázaro Manuel Alonso, in the context of the entry into force of measures to implement the foreign currency exchange market in Cuba.
According to Carbonell, the BCC —as the monetary authority and regulator of exchange rate policy— publishes the official "reference" rate so that financial institutions can set their rates.
But those final rates include a commercial margin over the Central Bank's reference.
Why doesn't the Central Bank rate match that of CADECA or the banks?
The official justified that these commercial margins are a “universal practice” and are used to cover operating costs, operational risks, and also risks associated with exchange rate differences, especially in a framework where the rate can fluctuate.
He also mentioned costs associated with cash handling and transportation.
In other words, the BCC rate acts as a benchmark rate, but it is not necessarily the same figure that the client will see at a CADECA or at a bank, because those operators publish their own buying and selling rates derived from the reference plus the commercial margin.
Carbonell explained that in segment 3 — which most directly affects individuals and various forms of management — the market operates under a managed floating system, which allows the rate to vary every day and that this rate is displayed on the “boards” in the offices.
He also noted that the formation of the daily rate is based on actual buying and selling operations conducted in the country: if supply exceeds demand, the rate may decrease; if demand exceeds supply, the rate tends to increase.
The citizen complaint: gaps of various weights
On social media, one of the most frequent criticisms—reflecting the sentiments of many users—is that the Central Bank sets a floating rate, but other institutions choose "whatever they want," and that “nobody uses the Central Bank's rate,” with daily examples showing differences of several pesos between the two.
That perception aligns with what was explained on TV: the BCC rate is a reference rate, and operators apply margins to determine their final rates.
In response to questions about whether the change is provided in cash or via transfer, Carbonell indicated that the principle of the currency exchange market is that the customer receives what they request: if they arrive with cash in foreign currency and want CUP in cash, they should receive CUP in cash; if they prefer a bank account for security reasons, they can choose that option.
The new rate of the regime
With the announcement from the Central Bank, Cuba now has three official exchange rates:
- The 1x24 rate is maintained for government operations: electricity, oil, basic goods, transportation… everything the State considers “strategic.”
- The rate of 1x120, for state or mixed enterprises that generate foreign currency, such as exporters or those in tourism. It supposedly aims to "stimulate competitiveness."
- The new "floating" rate, which will be updated daily, according to the Central Bank, "based on supply and demand." This will apply to individuals, the private sector, and any Cuban who wants to buy or sell foreign currency at CADECA or in the bank.
The trick: A "floating" market that doesn’t float
The Central Bank wants to make it seem that this new exchange rate will move freely, as in other countries, depending on how many dollars come in or out of the market.
But the problem is that there is no free market in Cuba, because everything goes through the hands of the State. The government decides:
- How many dollars does it sell for?
- Who are you selling them to?
- At what price?
- And when will they be put into circulation?
The economist Mauricio de Miranda Parrondo explained it straightforwardly: “The Minister of the Central Bank intends to tell the market at what rate it should operate. That’s not how the economy works.”
In a real market —such as in Mexico, Colombia, or the Dominican Republic— banks buy and sell currencies freely, and the Central Bank only publishes an average rate at the end of the day.
In Cuba, it's the other way around: first, the Central Bank announces the figure, and then it forces the market to adjust.
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