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The Cuban economist Pedro Monreal issued one of the most forceful critiques of the new currency exchange scheme of the Havana regime.
In his article “The Christmas Chorus of Exchange Rates in Cuba: Planning for New Distortions,” published in his newsletter on Substack, the researcher argued that the newly established system of multiple exchange rates does not correct the imbalances of the Cuban economy, but rather reorganizes them under an even more rigid and opaque control.
Monreal warned that the policy implemented by the Central Bank of Cuba (BCC) on December 18 represents "an attempt to redesign state economic management that goes beyond merely changing currencies."
Instead of a structural reform, what has been implemented —he said— is a new phase of the same centralized model, unable to generate efficiency or trust.
“The government has decided to plan new distortions,” stated the economist, describing the outcome as an “Economic Hydra” where each attempt at a solution creates a larger problem (just like the mythical monster, it grows new heads when one is cut off).
From "ordering" to the maze of currency exchange
Monreal's criticism stems from an observation shared by many economists: the Cuban regime has regressed in its aim to unify the exchange rates, one of the pillars of the so-called "monetary ordering" of 2021.
That unification aimed to integrate the economic system and provide coherence to internal prices. Four years later, the government of Miguel Díaz-Canel has done exactly the opposite: dividing the economy into currency compartments, each with its own exchange rate, its own logic, and its own level of privilege.
"Integration is abandoned and segmentation is enthroned, with the vague and unverifiable promise that this will lead to future integration at some point," Monreal scoffed.
The shift, according to his analysis, does not respond to an economic rationale, but rather to a political need: to maintain control over foreign currency flows amidst the productive collapse and the loss of reserves.
A reform that does not reform
Monreal emphasized that the new structure of three exchange segments cannot be considered a real market, but rather an accounting reorganization of scarcity.
Official rates —including the so-called "floating" rate— do not reflect market conditions, but rather the political function that the State assigns to each exchange space. "Economic calculation is not based on market prices, but on premeditated bureaucratic decisions," he explained.
In this context, the economist interpreted the new scheme as a cosmetic tweak of the centralized model, a makeover operation that aims to project modernization while not relinquishing control.
The result, as he warned, will be more discoordination, less transparency, and an increasing divide between the state and private sectors, which will operate under different rules and without a coherent system of relative prices.
Covert subsidies and accumulated distortions
One of the most pointed aspects of the analysis referred to the use of an overvalued Cuban peso (1 USD = 24 CUP) in state operations, a mechanism that acts as a hidden subsidy to unproductive sectors.
Monreal considered that this practice distorts the economy and stimulates imports, while reducing incentives for domestic production. "Subsidizing through the overvaluation of the exchange rate is less effective than doing it through fiscal means," he explained.
On the contrary, the devaluation applied to certain exporters does not guarantee a real increase in income or competitiveness. In a rigid productive system with little room for maneuver, a weaker exchange rate does not result in more exports, but rather higher domestic prices.
Regarding the "floating" segment intended for citizens and Mipymes, the economist defined it as a symbolic fiction: a showcase to demonstrate flexibility where there is only control.
The Hydra that Grows in Silence
Beyond the technicalities, Monreal's text maintained a certain tone of warning. He argued that the new framework consolidates a fragmented and dysfunctional economy, where each segment operates as a closed compartment.
The government has replaced economic calculation with a simulation of planning, he wrote. “Exchange rates are no longer tools of policy, but bureaucratic anchors.”
Monreal concluded with a powerful image: “Behind the initial jumble of currency segmentation will rise an economic Hydra, where cutting off one head —one dysfunction— will create more heads —more distortions—.”
Conclusion: A recurring model
In practice, the new exchange system does not signal the beginning of a reform, but rather the continuation of an exhausted model.
As the Cuban peso continues to lose value, the informal market maintains its role as a real reference for citizens and businesses. The State retains formal control of money, but has lost effective control of the economy.
The "Hydra" described by Monreal is, in essence, a metaphor for a country where every attempt to correct an imbalance creates three more. And, much like in Greek myths, as long as the government continues to fight the symptoms instead of the causes, the heads will keep multiplying.
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