This Thursday brings confirmation of the ongoing turbulence within Cuba's informal market observed over recent days. As of the morning of May 22, two key foreign currencies, the U.S. dollar and the euro, have increased in value after experiencing a dip the previous day. According to the independent outlet elTOQUE, the dollar has climbed back to 370 CUP, regaining the two pesos lost yesterday.
The euro has seen a more notable recovery, ascending to 390 CUP, up from the 388 CUP earlier in the week before dropping to 385 CUP on Wednesday. Meanwhile, the Freely Convertible Currency (MLC) remains steady at 260 CUP.
Current Exchange Rates in Cuba
As of 7:00 a.m. on May 22, 2025, the exchange rates reported by elTOQUE are as follows:
- USD to CUP: 370 CUP
- EUR to CUP: 390 CUP
- MLC to CUP: 260 CUP
The median values over the past 24 hours indicate a trend of instability in these currencies, with an upward movement in both purchase and sale prices. What is the outlook for Cuba's informal currency market for the rest of the month?
Forecast for Cuba's Currency Market
The latest report from the Observatory of Currencies and Finance of Cuba (OMFi) suggests that while the dollar and euro have shown relative stability in their rise, an increase in the willingness to sell, noted since early May, could lead to a stall in their growth.
Cuban economist Pavel Vidal, based in Colombia, highlighted in the report that a temporary surplus of dollars could disrupt the upward trend observed since March. His predictions for the end of this month are 357-368 pesos per dollar and 372-383 pesos per euro, while the MLC may hover between 255-265 pesos.
Despite this potential slowdown, the report emphasizes that the dollarization effect drives a heightened demand for U.S. currency. This trend poses significant risks, such as increased costs for goods sold by private businesses that import in foreign currency and sell in pesos, thus raising prices to ensure profitability.
Consequences of Dollarization
The growing use of dollars further deepens the divide between those with access to foreign currency and those without. In light of this situation, compounded by frequent and lengthy power outages, experts advise those with access to foreign currency to retain it while not neglecting the national currency.
Currency Conversion Values
Conversion rates for euros and U.S. dollars to Cuban pesos (CUP) on May 22 are as follows:
U.S. Dollar (USD) to Cuban Peso (CUP):
- USD 1 = 370 CUP
- USD 5 = 1850 CUP
- USD 10 = 3700 CUP
- USD 20 = 7400 CUP
- USD 50 = 18500 CUP
- USD 100 = 37000 CUP
Euros (EUR):
- EUR 1 = 390 CUP
- EUR 5 = 1950 CUP
- EUR 10 = 3900 CUP
- EUR 20 = 7800 CUP
- EUR 50 = 19500 CUP
- EUR 100 = 39000 CUP
- EUR 200 = 78000 CUP
Cubans closely monitor the informal exchange rates of the dollar, euro, and MLC, as these rates directly impact their real purchasing power in an economy plagued by shortages and inflation. The volatility of exchange rates in Cuba compels many island residents to keep a vigilant eye on the informal market, seeking ways to safeguard their purchasing power against the devaluation of the national currency.
Understanding Cuba's Informal Currency Market Dynamics
Why is the informal currency market important in Cuba?
The informal currency market in Cuba is crucial because it determines the real purchasing power of citizens in an economy marked by scarcity and inflation.
What factors contribute to the volatility of foreign currency rates in Cuba?
Factors such as limited foreign exchange availability, economic instability, and government policies contribute to the volatility of foreign currency rates in Cuba.