The Freely Convertible Currency (MLC) is experiencing a dramatic decline in Cuba's informal market. Recently, this monetary creation by the Cuban regime, used in the increasingly scarce shops designated for its use, has dropped another five pesos, now standing at 240 CUP per unit. Meanwhile, both the dollar and the euro remain unchanged as of July 8, valued at 385 CUP for the U.S. dollar and 425 CUP for the euro.
Current Exchange Rates in Cuba as of July 8, 2025 - 9:06 a.m.:
USD to CUP: 385 CUP
EUR to CUP: 425 CUP
MLC to CUP: 240 CUP
Understanding the MLC's Downward Spiral
From June 10 to June 28, the MLC held steady at 260 CUP. However, it began a sharp decline from late June, dropping 20 pesos in a matter of days. Back in April, the independent media outlet elTOQUE raised a critical question for Cuba's domestic economy: What lies ahead for the Freely Convertible Currency (MLC)?
Their Cuba's Currency and Finance Observatory (OMFi) examined the economic signals, indicators, and growing rumors about the potential disappearance or transformation of this controversial virtual currency. Since the end of 2024, rumors of a "possible" elimination of the MLC have been spreading rapidly among Cubans.
While authorities have promised to maintain retail stores and other services in this currency, the increasing number of shops operating solely in dollars has sparked concern. elTOQUE warns that this shift has caused "a certain panic among many people who have witnessed the depreciation in their accounts of what is also known as the bank dollar."
Decline of the MLC: Indicators from the Informal Market
According to OMFi reports, while partial dollarization has benefited certain sectors, it has also exacerbated inequality. The analysis notes, “Partial dollarization brings liquidity and financial stability to specific sectors and markets, but it also creates divisions and greater inequality.”
This trend has led to increased demand for strong currencies like the dollar and euro, contributing to the MLC's devaluation. OMFi cautioned, “The decreased interest in holding and purchasing MLC and Cuban pesos reduces their demand in the informal exchange market, leading to further depreciation.”
Shifting Economic Behavior: From Saving to Selling
This environment has triggered a shift in the population's economic behavior. elTOQUE reports that, following a period of intense MLC purchases to gain price advantages on products such as cigarettes, there is now "a growing number of people looking to offload or sell their MLC at current market prices."
The devaluation of this currency has turned what was once a valuable asset into a less reliable resource, especially as access to dollar-based stores expands for those receiving remittances or possessing foreign currency. Despite rumors and depreciation, elTOQUE's April analysis tempered the notion of an immediate disappearance of the MLC. Yet, the evolution of the Freely Convertible Currency raises the question anew: Is the MLC nearing its end?
USD to CUP Bill Equivalents:
1 USD = 385 CUP
5 USD = 1,925 CUP
10 USD = 3,850 CUP
20 USD = 7,700 CUP
50 USD = 19,250 CUP
100 USD = 38,500 CUP
EUR to CUP Bill Equivalents:
1 EUR = 425 CUP
5 EUR = 2,125 CUP
10 EUR = 4,250 CUP
20 EUR = 8,500 CUP
50 EUR = 21,250 CUP
100 EUR = 42,500 CUP
200 EUR = 85,000 CUP
500 EUR = 212,500 CUP
FAQs about Cuba's Currency and Exchange Rates
What is the current exchange rate of USD to CUP in Cuba?
As of July 8, 2025, the exchange rate of USD to CUP is 385 CUP for 1 USD.
Why is the MLC losing value in the Cuban market?
The MLC is losing value due to a combination of decreased demand in the informal market, increased dollarization, and growing public concern about its reliability as a currency.
What impact does the MLC's devaluation have on the Cuban economy?
The devaluation of the MLC affects economic behavior, reduces trust in the currency, and increases reliance on more stable foreign currencies, leading to greater economic inequality.