After nearly three weeks of declining prices, euros and dollars are showing surprising signs of recovery in Cuba's informal market this Wednesday morning.
The US dollar is making a significant comeback, valued at an average of 300 pesos at 7:00 AM local time on June 5th, an increase of 20 units compared to the previous day. The euro is also experiencing a rebound, rising by 10 pesos from 295 to 305 CUP. Meanwhile, the Freely Convertible Currency (MLC) remains steady at 260 CUP for the third consecutive day.
This recovery follows an unprecedented decline that began on May 16th, marked by rapid drops in currency values over the past two weeks. The informal market is now showing its first significant sign of recovery. On June 4th, there was a brief pause in the decline, with no changes in the prices of the three currencies.
During the 19-day slump, the dollar dropped by 115 pesos, with some days seeing decreases of 10 to 20 pesos. The euro experienced a similar trend, falling from 402.50 to 295 CUP in just two weeks.
With the dollar rising by 20 pesos and the euro by 10, the key questions are: Will these currencies continue to climb at the same rate they fell? Will they surpass their record prices in Cuba's informal market?
Today's Exchange Rates (June 5, 2024 - 7:00 AM in Cuba)
According to elTOQUE, the current exchange rates are:
- USD to CUP: 300 CUP
- EUR to CUP: 305 CUP
- MLC to CUP: 260 CUP
Alternative platform rates are:
- USD: Buy at 289 CUP, Sell at 302 CUP
- EUR: Buy at 300 CUP, Sell at 316 CUP
- MLC: Buy at 257 CUP, Sell at 262 CUP
Note that these informal exchange rates are not officially recognized or backed by any financial or governmental entity.
Currency Equivalents in Cuban Pesos
The current value of various denominations of euros and US dollars in Cuban pesos (CUP) as of June 5th are:
US Dollar (USD) to Cuban Peso (CUP)
- 1 USD = 300 CUP
- 5 USD = 1,500 CUP
- 10 USD = 3,000 CUP
- 20 USD = 6,000 CUP
- 50 USD = 15,000 CUP
- 100 USD = 30,000 CUP
Euros (EUR) to Cuban Peso (CUP)
- 1 EUR = 305 CUP
- 5 EUR = 1,525 CUP
- 10 EUR = 3,050 CUP
- 20 EUR = 6,100 CUP
- 50 EUR = 15,250 CUP
- 100 EUR = 30,500 CUP
In an extensive article published on May 21st, elTOQUE, an independent media outlet documenting the fluctuations in currency prices in Cuba's informal market since 2019, provided insights into the sharp decline in the value of dollars, euros, and MLC.
Economist Pavel Vidal Alejandro pointed to the announcement of the restoration of remittance services to the island via Western Union on May 9th and the proximity to a closed value (400 CUP x 1 USD) as factors that influenced market expectations.
Vidal Alejandro noted that a new balance had formed in market sentiment, with a growing number of people considering currency prices to be excessively high and opting to sell before a potential drop, increasing supply.
ElTOQUE also highlighted that temporary corrections are natural after extended periods of market increases. Since 2022, there have been six significant and consecutive declines in currency values, lasting up to weeks, but they have eventually recovered.
Vidal Alejandro concluded that the fundamental factors causing Cuba's internal and external economic imbalances remain unchanged, and the temporary currency declines should not be seen as a genuine revaluation of the Cuban peso.
Key Questions on Cuba's Currency Fluctuations
Given the recent recovery in the value of the dollar and euro in Cuba's informal market, several questions arise. Here are some answers to help understand the situation better.
What caused the decline in dollar and euro values in Cuba?
The decline was influenced by the announcement of the restoration of remittance services via Western Union and market sentiment believing currency prices were excessively high.
Will the dollar and euro continue to rise in value?
While the recent rise suggests a recovery, it is uncertain if they will continue to rise at the same rate or surpass previous record prices.