The informal currency exchange scene in Cuba continues to showcase shifting trends as 2024 draws to a close. While the U.S. dollar (USD) remains stable at 300 pesos, the euro (EUR) has gained ground, reaching 310 CUP. Meanwhile, the rate for the freely convertible currency (MLC) is set at 250 pesos, showing no fluctuation in recent hours.
Current Exchange Rates
Monday, December 30, 2024 - 12:11 PM in Cuba:
- USD to CUP according to elTOQUE: 300 CUP
- EUR to CUP according to elTOQUE: 310 CUP
- MLC to CUP according to elTOQUE: 250 CUP
After months of higher figures, the value of foreign currencies in the informal market began to decline following the Cuban government's announcement to implement a more flexible official exchange rate in 2025, which will respond to market supply and demand dynamics.
"It could coincide, as in previous instances, with the arrival of foreign residents who come to celebrate the New Year with their families. The influx of emigrants to the island means an increase in currency circulation and, therefore, a greater supply," stated elTOQUE in a recent article, offering an alternative explanation for the sudden drop in currency value in Cuba over the past few days.
Currency Conversion Rates
U.S. Dollar (USD) to Cuban Peso (CUP), based on the exchange rates as of December 29:
- 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 (310 CUP per euro):
- 1 EUR = 310 CUP
- 5 EUR = 1,550 CUP
- 10 EUR = 3,100 CUP
- 20 EUR = 6,200 CUP
- 50 EUR = 15,500 CUP
- 100 EUR = 30,000 CUP
Prospects for a "Floating Exchange Rate"
On December 18, the Cuban government announced the future establishment of a floating official exchange rate, aligned with supply and demand. This move aims to compete with the informal market.
Although details and the implementation date are still unknown, this rate intends to regulate the exchange market in a context where the informal currency market has predominated.
This measure is part of a partial dollarization strategy of the economy, impacting strategic sectors such as wholesale and retail trade, tourism, and foreign commerce. Additionally, the use of cash dollars will be permitted in areas like pharmacies, airports, and agricultural exporters.
Amidst an economic landscape marked by inflation and the failure of previous economic policies, the regime is once again attempting to restore control in a scenario where informal market rules largely dictate the economic reality for the population.
Understanding Cuba's Informal Currency Market
Why is the euro gaining value against the Cuban peso?
The euro is gaining value due to an increased demand and limited supply, influenced by factors like the arrival of foreign residents and shifts in the informal market's dynamics.
What impact could the floating exchange rate have on Cuba's economy?
A floating exchange rate could stabilize the market by aligning official rates with real market conditions, potentially reducing the influence of the informal market and supporting economic sectors.
How does the informal market affect everyday Cubans?
The informal market often dictates the real value of currencies, which can impact prices and availability of goods and services, affecting the cost of living for everyday Cubans.