The worth of foreign currencies in Cuba's informal market is rapidly declining following the regime's announcement to establish a more flexible official exchange rate in the coming months. This new rate aims to reflect market supply and demand dynamics. In recent hours, both the U.S. dollar and the euro, two of the primary currencies traded on the streets of Cuba, have continued their downward trend.
As of Tuesday morning, the dollar is valued at 305 CUP, marking a decrease of five pesos from the previous day. The euro also dropped five units, now standing at 315 CUP. Currently, only the Freely Convertible Currency (MLC) remains unchanged at 260 pesos.
Today's Exchange Rates in Cuba
Exchange rates as of December 24, 2024, at 7:56 a.m. in Cuba are as follows:
- U.S. dollar (USD) to CUP according to elTOQUE: 305 CUP.
- Euro (EUR) to CUP according to elTOQUE: 315 CUP.
- MLC to CUP according to elTOQUE: 260 CUP.
Anticipation Surrounding the "Floating Exchange Rate"
Last Wednesday, the Cuban government declared its plan to implement a floating official exchange rate based on supply and demand, aiming to compete with the informal market. The specifics and implementation date of this rate remain undisclosed, but it is intended to regulate the foreign exchange market, which has been largely dominated by the informal sector until now.
This measure is part of a partial dollarization of the Cuban economy, impacting key sectors such as wholesale and retail trade, tourism, and international commerce. Moreover, cash dollars will be permissible in areas like pharmacies, airports, and for agricultural producers involved in exports.
Amid an economic landscape characterized by inflation and previous economic policy failures, the regime is making another attempt to regain control over a situation where informal market rules heavily influence the economic reality for the general population.
Currency Conversion Equivalents
Here are the equivalent values for each available bill in U.S. dollars and euros to Cuban pesos (CUP) as of December 24:
- 1 USD: 305 CUP
- 5 USD: 1,525 CUP
- 10 USD: 3,050 CUP
- 20 USD: 6,100 CUP
- 50 USD: 15,250 CUP
- 100 USD: 30,500 CUP
- 1 EUR: 315 CUP
- 5 EUR: 1,575 CUP
- 10 EUR: 3,150 CUP
- 20 EUR: 6,300 CUP
- 50 EUR: 15,750 CUP
- 100 EUR: 31,500 CUP
Understanding Cuba's Currency Crisis
What is causing the decline in currency value in Cuba?
The decline is primarily due to the Cuban government's announcement of a more flexible official exchange rate, which aims to align with market supply and demand.
How does the floating exchange rate affect the informal market?
The floating exchange rate is intended to compete with the informal market, potentially reducing the influence of unofficial trading and stabilizing the economy.
Which sectors will be impacted by the partial dollarization?
Key sectors such as wholesale and retail trade, tourism, and international commerce will be affected, along with the allowance of cash dollars in certain areas.