Rising Dollar and Euro Values in Cuba's Black Market: A Growing Trend

For the second consecutive day, the prices of the dollar and euro have surged this Wednesday in Cuba's informal exchange market, as reported by elToque. It's been months since both currencies have seen price increases over two consecutive days. The dollar has climbed to 350 CUP, a two-peso increase from Tuesday. Meanwhile, the euro now stands at 353 CUP, one peso more than the previous day. The only currency holding steady is the Freely Convertible Currency (MLC), which remains valued at 275 CUP, significantly lower than the other two currencies.

The median values for buying and selling these currencies on Wednesday, which now include the Canadian dollar, reveal an upward trend for all currencies, except for the sale of the MLC.

Current Exchange Rates in Cuba

Exchange rates as of March 19, 2025, at 7:50 a.m. in Cuba:

• USD to CUP: 350 CUP
• EUR to CUP: 353 CUP
• MLC to CUP: 275 CUP

Will this trend in the informal market persist for the rest of March? The latest report from the Observatory of Currencies and Finance of Cuba (OMFi), after analyzing the dynamics of operations in the informal market, predicted conditions were ripe for an increase in dollars and euros by the end of this month.

"Due to the situation in the informal currency market, until the first week of March (where a slight excess demand for dollars and euros began to prevail), forecast models indicate a valuation of international currencies between 2% and 5% relative to the Cuban peso for the month. For the MLC, a fluctuation in the opposite direction is expected. The MLC might lose between 5% and 8% of its value compared to the Cuban peso," states the bulletin.

By March 31, exchange rates are expected to be around 350-360 CUP for 1 USD and 352-362 CUP for 1 EUR in central and maximum scenarios. For the MLC, rates are anticipated to be between 270-260 CUP in central and minimum scenarios.

However, economist Pavel Vidal notes that "forecasts are subject to new economic policy announcements by the Cuban government; adjustments in regulatory frameworks for the private sector; changes in market expectations; and any modifications that may arise in the Trump Administration's sanctions policy."

Economic Factors and Their Impact

Several economic variables are influenced by factors such as "accelerated inflation, stagnant tourism, temporary regulation of rice and bean prices, and an impending law on land ownership and use. These confirm that Cuban authorities have failed to halt the economic decline and are resorting to outdated, ineffective strategies," warns Vidal.

Equivalency of each available bill of euros and US dollars to Cuban pesos (CUP):

• USD to CUP, as of March 19 exchange rates:
  • 1 USD = 350 CUP
  • 5 USD = 1,750 CUP
  • 10 USD = 3,500 CUP
  • 20 USD = 7,000 CUP
  • 50 USD = 17,500 CUP
  • 100 USD = 35,000 CUP
• EUR to CUP:
  • 1 EUR = 353 CUP
  • 5 EUR = 1,765 CUP
  • 10 EUR = 3,530 CUP
  • 20 EUR = 7,060 CUP
  • 50 EUR = 17,650 CUP
  • 100 EUR = 35,300 CUP
  • 200 EUR = 70,600 CUP
  • 500 EUR = 176,500 CUP

Cubans are keenly aware of the informal exchange rates for the dollar, euro, and MLC, as these rates determine their real purchasing power in an economy dominated by scarcity and inflation. The fluctuations in exchange rates in Cuba lead many residents to closely monitor the informal market's evolution, seeking strategies to protect their purchasing power against the devaluation of the national currency.

In a country where salaries and pensions in Cuban pesos (CUP) are insufficient to meet basic needs, access to foreign currency has become essential to purchase necessary products in stores that only sell in foreign currency or to make transactions in the black market, where items unavailable in state-run commerce can be found.