The informal currency market in Cuba has reached a significant milestone this Saturday: the euro has soared to 400 Cuban pesos (CUP), breaking a symbolic and real barrier not seen since May 2024. The US dollar has also increased, now standing at 375 CUP, while the Freely Convertible Currency (MLC) remains steady at 260 CUP.
According to the independent outlet elTOQUE, this rise confirms a solid upward trend observed in recent days. Comparing with figures from Friday, June 6, the euro rose by four pesos in just 24 hours (from 396 to 400 CUP), and the dollar increased by one peso (from 374 to 375 CUP). Meanwhile, the MLC holds its value after a sharp drop last Thursday, when it fell from 265 to 260 CUP.
A Domestic Economic Impact
The euro's valuation at 400 CUP has immediate ramifications for the Cuban economy. This figure, while symbolic, highlights the ongoing devaluation of the Cuban peso, amidst state salaries tied to a weakened currency. The direct impact is felt in areas such as food, medicine, transportation, and access to basic services, many of which are dollarized or linked to MLC payments.
This new high for the euro revives memories of May 2024, when similar figures were reported. At that time, the European currency slightly exceeded 400 CUP, driven by a scarcity of foreign currency in official channels and rising inflation. Today, with an even frailer economy and no signs of effective recovery, reaching these levels again stirs concern among a population already struggling to meet basic needs.
The Volatile and Speculative Nature of the Market
The Observatory of Currencies and Finances of Cuba (OMFi) recently warned that the informal currency market is "highly volatile and sensitive to speculative and political factors." The lack of a transparent exchange market and distrust in official economic policies have fueled informal operations, governed by speculative and social logic.
Recently introduced tariffs by ETECSA, known as "the tariff hike," have created additional demand for foreign currency, particularly to pay for internet and communication services. This context puts further pressure on the black market, where many Cubans seek dollars and euros to stay connected with family abroad or cover daily expenses.
Currency Equivalents This Saturday
US Dollar (USD):
1 USD = 375 CUP
10 USD = 3,750 CUP
20 USD = 7,500 CUP
50 USD = 18,750 CUP
100 USD = 37,500 CUP
Euro (EUR):
1 EUR = 400 CUP
10 EUR = 4,000 CUP
20 EUR = 8,000 CUP
50 EUR = 20,000 CUP
100 EUR = 40,000 CUP
200 EUR = 80,000 CUP
500 EUR = 200,000 CUP
Immediate Outlook
The euro's climb and the dollar's consistent rise may persist if no measures are enacted to instill confidence in the national currency, as the "partial dollarization of the economy" threatens to fully take hold without a comprehensive reform establishing an official exchange rate and fair wages for workers and dignified pensions for retirees.
In the meantime, Cubans continue to grapple with one of the most painful repercussions of the crisis: a currency that is worth less each day, and foreign currency that is increasingly out of reach.
Understanding Cuba's Informal Currency Market
Why has the euro reached 400 Cuban pesos in the informal market?
The euro has reached 400 Cuban pesos due to increased demand for foreign currency, scarcity of official channels, and underlying inflationary pressures. Economic instability and speculation also contribute to this rise.
What impact does this have on Cuban citizens?
This surge affects the cost of living, making essentials like food, medicine, and services, which often require foreign currency, more expensive. It further erodes the purchasing power of the Cuban peso, impacting everyday life.
What measures could stabilize the currency market in Cuba?
Stabilizing the currency market would require economic reforms to establish a transparent and official exchange rate, along with measures to boost confidence in the national currency and align wages and pensions with economic realities.