The Dollar Continues Its Decline in Cuba: U.S. Currency Falls for 19 Straight Days

This Monday, the U.S. dollar woke up to another price drop in the informal Cuban market, marking an unprecedented streak of 19 consecutive days of decline. Although its descent has slowed, the American currency fell by two units and is now valued at 280 CUP, as recorded at 7 a.m. local time on June 3.

The rapid pace at which foreign currencies have plummeted in the past two weeks remains noteworthy, with some days seeing drops of 10 to 20 pesos. The dollar has shed 115 pesos over 19 days, an unprecedented speed of decline since elToque began documenting price fluctuations in the island's informal currency market.

Today, the euro holds steady at 295 CUP, the same price it reached the previous day. The Freely Convertible Currency (MLC) also remains unchanged at 260 CUP.

Exchange Rates as of June 3, 2024 - 7:46 a.m. in Cuba

Exchange rates according to elToque:

USD to CUP: 280 CUP

EUR to CUP: 295 CUP

MLC to CUP: 260 CUP

Alternative Exchange Rates from Other Platforms

USD: Buy at 276 CUP, Sell at 286 CUP

EUR: Buy at 288 CUP, Sell at 296 CUP

MLC: Buy at 253 CUP, Sell at 258 CUP

The informal exchange rate in Cuba provided here is not officially recognized nor backed by any financial or governmental entity. While many Cubans view the decline in the informal currency prices as positive, they question why consumer goods prices are not decreasing at the same rate.

Meanwhile, those fortunate enough to have access to foreign currencies in the country recommend holding off on selling, believing that the values of the euro, dollar, and MLC will eventually rebound.

The Cuban government continues to remain silent since mid-May when the currency prices began to fall in the informal market.

Currency Conversions

Here are the equivalences of available banknotes in euros and U.S. dollars to Cuban pesos (CUP) as of Wednesday, May 29:

U.S. Dollar (USD) to Cuban Peso (CUP):

1 USD = 280 CUP

5 USD = 1,400 CUP

10 USD = 2,800 CUP

20 USD = 5,600 CUP

50 USD = 14,000 CUP

100 USD = 28,000 CUP

Euro (EUR) to Cuban Peso (CUP):

1 EUR = 295 CUP

5 EUR = 1,475 CUP

10 EUR = 2,950 CUP

20 EUR = 5,900 CUP

50 EUR = 14,750 CUP

100 EUR = 29,500 CUP

This information can be useful for calculating the cost in Cuban pesos of any amount of dollars or euros. These conversions are based on rates of 280 CUP per dollar and 295 CUP per euro.

Plummeting Currencies in Cuba

Recently, elToque, which has been documenting the ups and downs of foreign currency prices in Cuba's informal market since 2019, commented on the sharp decline in the value of the dollar, euro, and MLC.

"The announcement of the restoration of remittance services to the island via Western Union (on May 9) and the proximity to a closed value (400 CUP x 1 USD) may have influenced market sentiment," stated economist Pavel Vidal Alejandro in a detailed article on the subject.

The economist noted that a "new balance in the consensus and attitude of market participants" has been formed. That is, "a growing number of people began to consider that the currency prices were excessively high and chose to sell before a possible drop," which boosted the supply.

Vidal Alejandro confirmed that since mid-May—coinciding with the start of the decline of the three reference currencies—there has been a significant increase in the supply of currencies in the monitored sample in virtual spaces.

On the other hand, elToque pointed out that it is natural for "temporary corrections to occur after an extended bullish period in the market." Since 2022, there have been six pronounced and consecutive declines in currency values, some of which have lasted weeks, but they have eventually recovered.

Is the Cuban Peso Really Appreciating?

Vidal Alejandro considered that the fundamental factors explaining the internal and external imbalances of the Cuban economy have not changed and that therefore "the current inflection of the rate should not be associated with a trend modification."

"Over the past four years, the value of the Cuban peso has shown a consistent depreciation trend, which is consistent with the high fiscal deficit, excessive issuance of Cuban pesos, contraction of national production and exports, growing dependence on imported products and inputs, dollarization, emigration, and generalized and persistent inflation in the markets," he said. In other words, the crisis continues, and there is no reason for the peso to change its devaluation trend.

Moreover, tourism growth has slowed, goods exports fell short of expectations, and the sugar harvest has yet to stabilize production. As if that weren't enough, by the end of February this year, the state budget imbalance had accumulated more than 20 billion pesos.

Meanwhile, Cuban economist Emilio Morales stated this week in an interview with CiberCuba that it is "impossible" for the Cuban peso to have appreciated on its own, gaining ground on the dollar as it has in recent days. He attributed the informal currency price drop to maneuvers by the ciberclarias (cyber-trolls) of the University of Computer Sciences (UCI) on the island.

In Morales' view, the only news that could independently revalue the peso is "if the government fell," which would open up the hope of a system change.

Morales also dismissed the idea that the decline in the price of dollars, euros, and MLC in Cuba is due to a supposed injection of currencies into the informal market.

"Where would they get the currencies if they have daily blackouts because they can't buy oil? It would have to be a multi-million dollar injection, and they don't have it," he questioned.

Asked if there could be any mechanism other than the intervention of the clarias to control inflation this week, the economist responded emphatically.

"That's a lie. Cuba does not produce. Where is the productive backup for that to happen? It will probably recover its course and surpass the 400-peso barrier," he asserted.