This Sunday saw a resurgence of the dollar in Cuba's informal market, climbing back to 345 Cuban pesos (CUP) after a slight dip the previous day. In contrast, the euro held steady at 345 CUP, while the MLC remained unchanged at 285 CUP. Following a minor decrease of three pesos, the dollar returned to the rate observed on Friday, February 28, highlighting the volatile nature of Cuba's exchange market and the uncertainty influencing decisions within the black currency market.
Exchange Rate Update: March 2, 2025 - 05:00
- Dollar (USD) to Cuban pesos (CUP): 345 CUP
- Euro (EUR) to Cuban pesos (CUP): 345 CUP
- MLC to Cuban pesos (CUP): 285 CUP
Currency Trends Since January 2025
Since the start of 2025, Cuba's informal currency market has seen a robust upward trend, with the dollar, euro, and MLC consistently appreciating against the Cuban peso (CUP). This ongoing increase reflects the persistent depreciation of the national currency amidst the island's economic challenges. In January 2025, the dollar started the year trading at around 320 CUP, with the euro slightly higher at 325 CUP. The MLC, used for transactions in state-run stores, was approximately 270 CUP.
Throughout February, foreign currencies continued to rise. High demand for dollars pushed its rate to 340 CUP, while the euro followed a similar trajectory, reaching nearly the same level. Concurrently, the MLC also incrementally increased to 280 CUP by the end of the month. As of March 2025, these figures persist in their climb. On Sunday, March 2, the dollar regained ground after a slight drop the day before, positioning itself at 345 CUP, matching the euro's value. Meanwhile, the MLC remains stable at 285 CUP, with no significant fluctuations recently.
Impacts of Economic Instability
The sustained rise in these currencies within the informal market points to a growing deterioration of the Cuban peso, exacerbated by inflation and a shortage of foreign currency in the national economy. The exchange rate instability, driven by economic uncertainty and government-imposed restrictions, has led the informal market to become the main avenue for currency exchange. Short-term projections suggest this trend may persist, as the demand for foreign currencies continues to outstrip the supply available through official channels.
This exchange rate volatility prompts many Cubans to closely monitor the informal market, seeking strategies to safeguard their purchasing power against the devaluation of the CUP.
Understanding Cuba's Exchange Market Dynamics
Why is the dollar appreciating in Cuba's informal market?
The dollar is appreciating in Cuba's informal market due to high demand and limited supply, alongside the national currency's devaluation and economic instability.
How does the exchange rate impact Cuban citizens?
Fluctuating exchange rates affect Cuban citizens by diminishing their purchasing power and increasing the costs of goods and services, particularly those imported or requiring foreign currency.
What role does the informal market play in Cuba's currency exchange?
The informal market plays a crucial role in Cuba's currency exchange, providing a more accessible platform for obtaining foreign currency due to restrictions and inefficiencies in official channels.