The US dollar remains stable at 300 pesos in Cuba's informal market, holding its ground since reaching this mark in February, according to data from elToque, an independent platform monitoring Cuba's informal exchange rates. This level, which once set a record, has fluctuated amidst the country's economic volatility.
Cuba continues to face a challenging economic landscape marked by inflation and shortages of essential goods. Amid this backdrop, it has been reported that the euro has dropped by three pesos, trading at 305 on Thursday, down from 308 on Wednesday. Meanwhile, the Freely Convertible Currency (MLC) has also remained at 250 CUP, unchanged from the previous day.
Current Exchange Rates and Economic Challenges
As of Thursday, December 26, 2024, at 12:07 PM in Cuba, the exchange rates according to elToque are as follows:
- USD to CUP: 300 CUP
- EUR to CUP: 305 CUP
- MLC to CUP: 250 CUP
The decline occurs amidst growing frustration in the private sector due to recent government-imposed restrictions, particularly the implementation of Resolution 56/2024 by the Ministry of Domestic Trade. This resolution severely limits wholesale operations, jeopardizing the survival of Micro, Small, and Medium Enterprises (MSMEs), non-agricultural cooperatives (CNAs), and self-employed workers (TCPs).
The new regulation mandates that MSMEs and cooperatives must conduct business exclusively through state-owned or government-controlled trading companies. Additionally, it imposes strict deadlines of 90 days to update licenses and 120 days to clear wholesale inventories. Non-compliance results in severe penalties, including fines, confiscations, and the revocation of operating licenses.
Temporary Stability Amid Economic Struggles
Therefore, the current stability of the dollar might be temporary due to the inherent volatility of the informal market and the island's overall economic conditions. External factors such as remittance inflows or political decisions could also impact the dollar's exchange rate in the short term.
Year-End Celebrations Amid Economic Hardships
As the end of the year approaches, Cubans continue to grapple with the challenges of a crisis-ridden economic system. The dollar, at 300 pesos, remains a significant hurdle for many families struggling to access food this holiday season. Recent reports indicate that a pound of pork exceeds 1,400 pesos in the informal market, making it a luxury for most people.
Additionally, other staples of the Cuban diet have also seen substantial price increases. Local rice is priced around 200 pesos per pound, while black and red beans can reach up to 450 pesos per pound. These prices are prohibitive, especially considering Cuba's minimum wage of 2,100 pesos per month.
The situation worsens with the removal of subsidies for the basic basket, leaving many families without access to essential products at affordable prices. Although the government recently assured that the ration book will be maintained for 2025, the stability of the dollar in the informal market does not translate into tangible improvements for the population.
The purchasing power of Cubans continues to decline, and year-end festivities are overshadowed by uncertainty and the inability to uphold culinary traditions deeply rooted in national culture.
FAQs on Cuba's Economic Situation and Exchange Rates
Why is the US dollar stable in Cuba's informal market?
The US dollar remains stable at 300 pesos due to the current economic conditions and government policies influencing the informal market.
What impact do recent government restrictions have on private businesses?
Recent restrictions, such as Resolution 56/2024, limit wholesale trade and pose risks to the survival of small businesses, cooperatives, and self-employed workers in Cuba.
How are rising food prices affecting Cuban families?
Soaring food prices, especially for essentials like pork, rice, and beans, are making it difficult for Cuban families to afford basic necessities, further exacerbating their economic struggles.