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.
Monday, December 30, 2024 – 12:11 PM in Cuba:
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.
U.S. Dollar (USD) to Cuban Peso (CUP), based on the exchange rates as of December 29:
Euros (310 CUP per euro):
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.
