The euro is gaining traction in Cuba's informal currency market, now reaching a rate of 387.5 Cuban pesos (CUP) as of Sunday, marking an increase of two pesos from the previous day, according to independent monitoring by elTOQUE. This rise underscores the upward trend of the European currency against the ever-weakening Cuban peso, which lacks effective backing from the regime's monetary authorities.
Informal Exchange Rates in Cuba
Sunday, May 4, 2025 - 07:00
US Dollar (USD) to Cuban Peso (CUP): 370 CUP
Euro (EUR) to Cuban Peso (CUP): 387.5 CUP
Freely Convertible Currency (MLC) to Cuban Peso (CUP): 265 CUP
Meanwhile, the US dollar holds steady at 370 CUP, showing no change from Saturday after a five-peso increase over the past week. This temporary stability does not alleviate the inflationary pressures plaguing the domestic economy, fostering uncertainty among citizens.
The freely convertible currency (MLC) similarly remains unchanged at 265 CUP, indicating less volatility compared to major foreign currencies.
Looking back at the euro's historical behavior in the informal market, there's a clear pattern of growth since early 2021 when it barely exceeded 30 CUP. From mid-2022, its value began to climb more rapidly, peaking in June 2024 when it briefly surpassed 420 CUP.
After a sharp drop in July, bringing its exchange rate to around 310 CUP, and another in December to 300 CUP (temporary corrections), the trend shows a clear upward trajectory, with a more pronounced surge since mid-March 2025.
The euro's slight appreciation highlights the diversification of preferences in the informal market, amid significant remittances and transactions in euros, particularly from Spain and other European countries with a strong Cuban diaspora presence.
The regime's inability to offer a competitive official rate, coupled with the structural crisis of the economic model, continues to drive the population toward the informal market as the sole avenue for accessing foreign currency. This distortion exacerbates inequalities and erodes the purchasing power of the average salary.
The constant devaluation of the Cuban peso against major currencies keeps millions of Cubans on edge, trapped in a stagnant economy marked by shortages, inflation, and a lack of structural solutions from the government.
Understanding Cuba's Informal Currency Market
Why is the euro rising in Cuba's informal market?
The euro is increasing due to the weakening of the Cuban peso and the lack of effective monetary policy by the regime. Additionally, significant remittances and transactions in euros contribute to its demand.
How does the informal currency market impact Cubans?
The informal market offers an alternative to the official exchange rates, but it also exacerbates economic inequalities and erodes the purchasing power of Cubans, as they face a devalued national currency.
What challenges does the Cuban economy face?
Cuba's economy struggles with shortages, inflation, and systemic structural issues, compounded by a lack of competitive official exchange rates, driving citizens to rely on the informal market.