The Cuban economist and activist Manuel Milanés applied to Cuba the famous phrase popularized by Argentine President Javier Milei to describe the exchange rate spiral that is destroying the purchasing power of Cubans: "The dollar has no ceiling because the peso has no floor, and that’s happening in Cuba."
Milanés said in an interview with Tania Costa for CiberCuba, at a time when the dollar in the Cuban informal market is setting new records, reaching 625 Cuban pesos (CUP) last Sunday, compared to an official exchange rate of around 533 CUP.
The host Tania Costa raised the issue with concrete data: "We are seeing that the dollar and the euro are rising sharply in Cuba, and this is going to get worse because tourism is not coming in. Fewer airplanes are flying in, less money is coming in, and when there is less, prices go up."
Milanés responded with an explanation based on the laws of supply and demand, comparing them to physical laws: "In Cuba, unfortunately, this laboratory is demonstrating to us that there are laws, just as there are physical laws and mathematical laws. Just as no one should think about jumping from the 20th floor expecting to float because of the law of gravity, there are laws in economics such as supply and demand."
The diagnosis is clear: Cuban national production is virtually non-existent, and the country relies on imports paid for in dollars. "If there is less and less national production, it is zero. If Cuba depends on imports, those imports are in dollars," he noted.
This structural reality is compounded by factors that worsen the shortage of foreign currency. Eleven airlines suspended operations to Cuba in 2026, including Air Canada, Iberia, Air France, and Turkish Airlines, and hotel occupancy plummeted to 18.9% in the first quarter of the year.
Between January and April 2026, tourism in Cuba dropped by 46.4%, with only 528,271 travelers during that period. Milanés summed it up with a phrase that captures the collapse: "People are sad because they used to sell joy, and now there's not even that."
The regime is also losing foreign currency on other fronts: the reduction of joint ventures and the interruption of payment processing by Visa and Mastercard. Meanwhile, the country has run out of diesel and fuel oil to sustain the electrical system, with power outages lasting 20 to 22 hours daily in some areas of Havana.
Cuba imports about 80% of its internal consumption, all paid for in dollars, while agricultural production has collapsed: root vegetable production dropped by 44% in 2023, pork by 93.2%, and eggs by 43%.
For Milanés, the outcome is mathematical: "The supply is decreasing while the demand is increasing, as the desperation among Cubans to leave or the need for dollars to buy grows. And if the supply is lower and the demand is higher, then the value that the peso could reach is incalculable."
The economist was categorical in rejecting any reformed version of the system: "It's not that a better communism or better socialism can be achieved. It's that it doesn't work, plain and simple, it doesn't work and cannot work."
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