This past Sunday, August 3, the informal exchange rate of the U.S. dollar (USD) in Cuba reached a new record for the year, trading at 395 Cuban pesos (CUP) in the informal market. This figure not only marks the highest level this year but also matches the historic peak recorded in May 2024 when the U.S. currency first hit this level, signaling a new phase of accelerated depreciation for the Cuban peso.
Informal Exchange Rates in Cuba
Sunday, August 3, 2025 - 05:00 AM
USD to CUP: 395 CUP
EUR to CUP: 440 CUP
MLC to CUP: 220 CUP
Meanwhile, the euro (EUR) holds steady at 440 CUP, a historic high reached on July 26, which seems to be solidifying over time, potentially foreshadowing further increases in its informal valuation. In contrast, the Freely Convertible Currency (MLC) remains at 220 CUP, a low point for the year reached on July 24, standing 20 CUP below its January 2025 value, according to informal market rates compiled by CiberCuba.
The Dollar's Climb: A Historic Overview
The historical chart reveals a clear pattern of the dollar's ascent since early 2021. Although there have been periods of relative stability and temporary declines, particularly between September and November 2024, the overall trend has been consistently upward. Beginning in December of last year, the currency resumed a steady upward trajectory, intensifying in recent months and pushing it back to the maximum levels reached in the spring of 2024.
Economic Implications of the Dollar's Surge
This new surge in the dollar not only reflects the ongoing loss of purchasing power of the Cuban peso but also highlights the persistent economic uncertainty facing the island. The shortage of basic goods and the limited supply of foreign currency in the official market continue to fuel demand in the black market.
The dollar reaching 395 CUP again has direct implications for the prices of goods and services, especially those reliant on foreign procurement. It also deepens the divide between those with access to foreign currency and those solely dependent on Cuban peso wages.
Amidst this backdrop, the Cuban population continues to grapple with a complex economic reality characterized by inflation, shortages, and increasing market informality. The dollar’s behavior serves as a barometer of this situation: each new record underscores the deterioration of the national economy and the urgent need for structural changes to halt the freefall of the Cuban peso.
Understanding Cuba's Economic Challenges
Why is the Cuban peso depreciating so rapidly?
The rapid depreciation of the Cuban peso can be attributed to a combination of factors, including economic mismanagement, a lack of foreign investment, and limited access to foreign currency, which together exacerbate the island's economic instability.
How does the dollar's increase affect everyday life in Cuba?
The increase in the dollar's value directly impacts the cost of goods and services, making imports more expensive and exacerbating inflation, which further strains the daily lives of those earning in pesos.
What are the potential solutions to stabilize the Cuban economy?
Potential solutions include implementing structural economic reforms, increasing foreign investment, and diversifying the economy to reduce dependency on a limited number of sectors.