In a dramatic turn of events, the value of foreign currencies in Cuba has been sharply declining following the Cuban government's recent announcement. The government plans to implement a more adaptable official exchange rate by 2025, which will be aligned with market supply and demand. Over the past few hours, the three key currencies in the informal market have continued their downward trend.
As of early Monday, the U.S. dollar stands at 310 CUP, a drop of seven pesos from the previous day. Similarly, the euro has decreased by five pesos, now valued at 320 CUP. The Freely Convertible Currency (MLC) has also fallen, reaching 260 pesos, three units less than on Sunday. The regime's announcement of a so-called "floating exchange rate" aims to regulate the currency market amidst a scenario where the informal market dominates, setting real prices for goods consumed by the populace.
Exchange rates as of 12/23/2024 - 7:47 a.m. in Cuba:
Dollar (USD) to CUP rate according to elTOQUE: 310 CUP.
Euro (EUR) to CUP rate according to elTOQUE: 320 CUP.
MLC to CUP rate according to elTOQUE: 260 CUP.
Government's Strategy to Control the Currency Market
Last Wednesday, the Cuban government unveiled plans to introduce a flexible official exchange rate that will adjust based on supply and demand, attempting to compete with the informal market, which currently dictates the real value of the Cuban peso. This measure is part of a partial dollarization of the economy, impacting critical sectors such as wholesale and retail commerce, tourism, and foreign trade. It will also permit the use of cash dollars in areas like pharmacies, airports, and agricultural exporters.
In an economic environment marked by inflation and previous policy failures, the regime is striving once again to regain control over a landscape where informal market rules largely dictate the economic reality for the Cuban people.
Currency Conversion Equivalents
Conversion of U.S. dollars and euros to Cuban pesos (CUP) as of December 23:
U.S. Dollar (USD) to Cuban Peso (CUP):
1 USD = 310 CUP.
5 USD = 1,550 CUP.
10 USD = 3,100 CUP.
20 USD = 6,200 CUP.
50 USD = 15,500 CUP.
100 USD = 31,000 CUP.
Euros:
1 EUR = 320 CUP.
5 EUR = 1,600 CUP.
10 EUR = 3,200 CUP.
20 EUR = 6,400 CUP.
50 EUR = 16,000 CUP.
100 EUR = 32,000 CUP.
Understanding Cuba's Currency Market Dynamics
What prompted the decline in currency values in Cuba's informal market?
The decline in currency values is largely due to the Cuban government's announcement of implementing a flexible official exchange rate by 2025, aimed at aligning with market supply and demand.
How does the new exchange rate policy affect the Cuban economy?
The new policy attempts to regain control over the currency market, which is dominated by the informal sector, and could impact critical economic sectors such as retail, tourism, and foreign trade.
What are the current exchange rates for USD and EUR in Cuba?
As of December 23, 2024, the U.S. dollar is valued at 310 CUP, and the euro is at 320 CUP in the informal market.