Plummeting Exchange Rates: Record Drop in Cuba's Informal Currency Market

Sunday, May 26, 2024 by Richard Morales

Plummeting Exchange Rates: Record Drop in Cuba's Informal Currency Market
Wet and moldy dollars (reference image) - Image by © X / @LANACION

The price of foreign currencies in Cuba's informal market experienced an unprecedented drop this Sunday, with both the U.S. dollar and the euro plummeting by ten points. This dramatic decline of 10 Cuban pesos (CUP) in less than 24 hours signals a recovery of the Cuban peso's value, keeping the population on edge and sparking speculations among experts who lament the lack of reliable information to analyze the informal market's behavior over the past two weeks.

Confirming the downward trend in key currency exchange rates, this Sunday saw both the dollar and the euro drop by 10 Cuban pesos, bringing the U.S. dollar to 340 CUP and the euro to 350 CUP. The previous day and the day before had already seen declines of five Cuban pesos in both currencies. Since elTOQUE began compiling the informal market exchange rates in Cuba from median online buy and sell offers, such a significant fall in the prices of dollars and euros had not been recorded.

The freely convertible currency (MLC) also felt the impact of this sharp decline, although it only dropped by five points, with its rate standing at 285 CUP as of 6 a.m. on May 25th (local Cuban time).

Current Exchange Rates as of May 26, 2024 - 6:16 a.m. in Cuba

According to elTOQUE:

  • USD to CUP exchange rate: 340 CUP
  • EUR to CUP exchange rate: 350 CUP
  • MLC to CUP exchange rate: 285 CUP

Alternative platform exchange rates:

  • USD: Buy 331 CUP, Sell 344 CUP
  • EUR: Buy 346 CUP, Sell 356 CUP
  • MLC: Buy 281 CUP, Sell 289 CUP

The U.S. dollar has dropped 55 pesos over 10 consecutive days of decline. While Cubans celebrate the increased purchasing power this brings, many question why consumer goods prices have not similarly decreased, criticizing their profitable stagnation.

If the spectacular fall in currency prices is confirmed at the end of the day, and the current trend consolidates, it would be logical for Cuban authorities to make a statement. For some time, they have blamed the rise in foreign exchange rates in the informal market on the actions of independent platforms, particularly elTOQUE.

The country's banking authorities and monetary policy regulators have remained silent over the past 10 days, missing the opportunity to leverage the informal market dynamics to relaunch their failed "official exchange rate" proposals and circulate dollars in quantities that could help standardize rates and stabilize foreign currency prices.

Understanding Cuba's Informal Currency Market Fluctuations

This section provides answers to common questions about the recent changes in Cuba's informal currency market.

Why did the U.S. dollar and euro drop so significantly in Cuba's informal market?

The recent drop is attributed to a recovery in the value of the Cuban peso and speculative activities among currency traders. The exact reasons remain unclear due to a lack of reliable information.

How does elTOQUE determine the informal exchange rates?

elTOQUE compiles the informal exchange rates based on the median of online buy and sell offers, providing a snapshot of the market's activity.

What impact does the declining dollar and euro have on Cuba's economy?

A declining dollar and euro can increase the purchasing power of Cubans holding CUP. However, the stagnant prices of consumer goods mean that the benefits are not fully realized by the population.

© CubaHeadlines 2024

Continue in App

For a better experience, continue in our app.

Download App