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The new rise of the dollar in the Cuban informal market up to 550 pesos per unit not only sets another historical record for the U.S. currency on the island: it also confirms the accelerated collapse of the purchasing power of workers and retirees, even after the wage and pension increases announced by the regime in the past year.
The official data and recent developments in the currency market reveal a devastating reality: in Cuba today, people earn more pesos than a year ago, but those pesos are worth much less.
In April 2025, the National Office of Statistics and Information (ONEI) reported that the average monthly salary in Cuba was 5,839 Cuban pesos (CUP). At that time, the informal dollar was around 363 CUP, which meant that the average income equated to about 16 dollars per month.
A year later, the average salary increased nominally to a range close to 6,900 CUP, according to official estimates and independent economists. However, with the dollar skyrocketing this Tuesday to 550 CUP, that salary amounts to just 12.6 dollars per month.
In real terms, the Cuban state worker lost about 22% of their purchasing power in dollars in just one year, despite the salary increase in pesos.
The situation is even more dramatic for retirees. The average pensions, which after the partial increases of 2025 reached around between 9 and 10 dollars monthly at the informal exchange rate, today barely amount to between 4 and 4.5 dollars.
In many cases, minimum pensions fall even below four dollars a month. That means that thousands of Cuban elderly survive on just over 13 cents a day.
The decline in purchasing power occurs alongside a sustained increase in the prices of food, medicine, transportation, and basic goods. A pound of pork easily exceeds 1,200 CUP in many provinces. A dozen eggs can cost between 3,000 and 4,000 CUP. A liter of oil is around 1,200 CUP and a package of imported chicken already exceeds 4,500 CUP in the informal market.
Meanwhile, basic hygiene products such as detergent, toothpaste, and soap continue to periodically vanish from state stores and reappear for resale at prices that are unaffordable for most workers.
The partial dollarization of the economy has further exacerbated the social divide. Many businesses sell essential products exclusively in foreign currency or through cards linked to foreign currency, leaving out millions of Cubans who rely solely on state salaries and pensions paid in depreciated pesos.
The result is a dual economy where survival increasingly depends on receiving remittances, having access to dollars, or participating in informal activities.
The crisis particularly affects professionals in the state sector. Doctors, teachers, engineers, and retirees have seen their incomes severely diminished due to inflation. A doctor can earn the equivalent of 25 or 30 dollars a month at best, while a retiree can barely afford to buy a few basic food items for a week.
The loss of value of the Cuban peso has been staggering. In 2020, the informal dollar was around 42 CUP. Today, it is worth 550. This implies a depreciation of nearly 95% of the national currency in just six years.
The failure of the Monetary Order of 2021, the massive printing of pesos without productive backing, the decline in tourism, the destruction of the national industry, and the extreme dependence on imports have accelerated the country's economic deterioration.
The gap between the official rate and the informal market also reflects the total loss of confidence in the national currency. Although the Central Bank maintains an artificially low official reference, the everyday economy of Cubans operates under the real values established by the street.
Every increase in the dollar immediately reduces the purchasing power of salaries and pensions. And while the regime continues to announce nominal increases in pesos, inflation and devaluation end up swallowing any improvement before it reaches the pockets of the population.
For millions of Cubans, the outcome is a constant feeling of impoverishment: working more, earning more pesos, and being able to buy less food.
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