The euro's value in Cuba's informal market has skyrocketed, showing no signs of slowing down as the week begins. Within just a few hours, the European currency surged from 490 to 499 Cuban Pesos (CUP), inching closer to the 500 pesos mark. This nine-peso increase compared to the previous day highlights the severe devaluation of the Cuban Peso amid the country's increasingly bleak economic landscape.
Meanwhile, the US dollar remains steady at 435 CUP as of September 29, maintaining a 64-peso difference from the euro. The Freely Convertible Currency (MLC), which has experienced significant fluctuations recently, continues to hold at 210 CUP for several days now.
The Euro's Dominance in 2025's Informal Market
Throughout 2025, the euro has seen the most significant increase in value within Cuba's informal market, becoming a key currency for many Cubans aiming to safeguard their savings against the relentless devaluation of the Cuban Peso. On January 1, 2025, the euro was priced at 310 CUP, but nearly nine months later, it has risen by 189 CUP to reach 499 CUP, underscoring the peso's depreciation.
Factors Driving the Euro's Surge
Several interconnected factors contribute to the euro's rise. There's a high demand for strong currencies in the face of rampant inflation and rapidly devaluing wages. The euro has become a safe haven not only for those receiving remittances from Europe but also for individuals needing to travel or conduct transactions linked to the continent.
The limited supply of euros, especially compared to the more readily available US dollars from American remittances, adds to the price pressure. Additionally, widespread distrust in the CUP and speculative market behavior, where many buy anticipating further increases, fuel these price hikes.
Impact on Daily Life
The rising cost of the euro directly impacts Cubans' wallets. As salaries and pensions paid in pesos lose value swiftly, the prices of goods and services tied to foreign currencies—from technology to medicine and airfare—continue to soar.
Those reliant on CUP income see their purchasing power plummet, while those receiving euro remittances find each transfer's value multiplied, widening the social divide.
Comparison with the Dollar and MLC
Although the dollar has also increased, its growth has been more gradual compared to the euro. On many occasions, while the dollar either stabilizes or slightly declines, the euro continues to climb. The MLC has shown more erratic behavior with occasional drops, reinforcing the preference for the European currency.
In this environment, the euro has become the primary gauge of the informal economy, partially displacing the dollar as the price reference for certain transactions. Without effective monetary reforms or increased foreign currency availability through official channels, the euro is likely to remain a safe asset against the CUP's collapse.
For now, it seems the euro will continue to lead the charge in Cuba's informal market, reflecting the scale of the currency crisis and the irreversible decline of the peso as legal tender.
USD and EUR to CUP Conversion Rates
As of September 29, here are the conversion rates of US dollar and euro to Cuban Peso:
USD to CUP:
- 1 USD = 435 CUP
- 5 USD = 2,175 CUP
- 10 USD = 4,350 CUP
- 20 USD = 8,700 CUP
- 50 USD = 21,750 CUP
- 100 USD = 43,500 CUP
EUR to CUP:
- 5 EUR = 2,495 CUP
- 10 EUR = 4,990 CUP
- 20 EUR = 9,980 CUP
- 50 EUR = 24,950 CUP
- 100 EUR = 49,900 CUP
- 200 EUR = 99,800 CUP
- 500 EUR = 249,500 CUP
In July, Manuel Marrero announced planned changes to Cuba's official exchange market set to be implemented in the second half of the year. However, no updates have been provided thus far.
Understanding Cuba's Currency Crisis
Why is the euro increasing in value in Cuba's informal market?
The euro is rising due to high demand for stable currencies amidst inflation and devaluing wages, limited supply, and speculative buying behavior.
How does the euro's rise affect Cubans?
The euro's increase devalues salaries and pensions in CUP, raising the cost of goods and services priced in foreign currencies, and widens the social gap.
What is the current exchange rate for the euro and the dollar?
As of September 29, the euro is at 499 CUP, while the US dollar is at 435 CUP in the informal market.