The informal market in Cuba experiences another record-setting day as both the dollar and euro climb, with the U.S. currency making a particularly notable leap. The dollar now stands at 455 CUP per unit, marking a five-peso increase from yesterday's average selling price, as reported by the independent outlet elTOQUE, which has been tracking currency fluctuations in Cuba since 2021.
Meanwhile, the euro continues its upward trend for the second consecutive day, reaching 512 CUP, a two-peso rise since Thursday. The Moneda Libremente Convertible (MLC), the virtual currency used by the Cuban regime, remains steady at 210 CUP, a rate it has maintained since September 25.
Economic Strain as Dollar and Euro Climb
The relentless rise of the dollar and euro in Cuba's informal market signals a severe devaluation of the Cuban peso, exacerbating the desperation among citizens for stable currencies. This upward trajectory, evident over the past months, underscores the island's deepening economic crisis. In late July, the dollar was priced around 370 CUP, while the euro was approximately 430 CUP. In just two months, these rates have surged over 20%, posing a direct threat to the financial stability of Cubans.
Impact on Living Standards and Inequality
For most Cubans, who earn their wages in the national currency, this sharp increase results in a significant loss of purchasing power. With an average monthly salary barely surpassing 4,000 CUP, a Cuban worker would need nearly all their income just to purchase 10 dollars — if they can find them. The rising cost of the dollar and euro also drives up prices for essential goods, many of which are imported by entrepreneurs dealing in foreign currencies. This situation further widens the gap between those receiving remittances from abroad and those reliant solely on state incomes.
The Decline of the Cuban Peso
The absence of a clear monetary policy from the Cuban government, coupled with a production collapse and a shortage of foreign currency at the state level, fuels an unprecedented spiral of devaluation. Trust in the Cuban peso as a viable means of savings or exchange has nearly vanished, pushing many to seek refuge in foreign currencies to safeguard their purchasing power. Independent economists warn that if this trend continues, Cuba could face an even more severe crisis. The de facto dollarization of many economic sectors, lacking institutional backing or guarantees, heightens the vulnerability of the poorest and creates a constant state of uncertainty.
A Nation on the Brink
The persistent rise of the dollar and euro is more than just a financial indicator; it reflects Cuba's broader economic and social collapse. While authorities remain silent or blame "external interests" for the situation, citizens grapple with skyrocketing prices, inadequate wages, and a national currency that loses value daily. Under these conditions, mass emigration, increased informal employment, and reliance on remittances have become survival strategies for millions of Cubans.
USD to CUP Exchange Rates on October 10:
- 1 USD = 455 CUP
- 5 USD = 2,275 CUP
- 10 USD = 4,550 CUP
- 20 USD = 9,100 CUP
- 50 USD = 22,750 CUP
- 100 USD = 45,500 CUP
EUR to CUP Exchange Rates:
- 1 EUR = 512 CUP
- 5 EUR = 2,560 CUP
- 10 EUR = 5,120 CUP
- 20 EUR = 10,240 CUP
- 50 EUR = 25,600 CUP
- 100 EUR = 51,200 CUP
- 200 EUR = 102,400 CUP
- 500 EUR = 256,000 CUP
Since late 2024, the Cuban government has proposed introducing a floating exchange rate system to narrow the gap between the official and informal currency values. However, over six months later, details on its implementation remain undisclosed. Independent economists argue that any attempt to standardize the exchange system must start with a reference rate close to the Informal Market Representative Rate (IMRR). The government would need to officially recognize prices four times higher than the current 120 CUP per euro maintained by state banks and official exchange houses (CADECA).
FAQs on Cuba's Currency Crisis
Why is the Cuban peso devaluing so rapidly?
The rapid devaluation of the Cuban peso is driven by a lack of clear monetary policy, production collapse, and shortage of foreign currency, leaving citizens to rely on foreign currencies for stability.
How does the rising cost of dollars and euros affect Cubans?
The increasing cost of dollars and euros reduces the purchasing power of Cubans, raises prices for essential goods, and widens the inequality gap between those receiving remittances and those with state incomes.
What are independent economists suggesting to stabilize the currency exchange system in Cuba?
Economists suggest that stabilizing the currency exchange system should begin with recognizing a rate close to the Informal Market Representative Rate (IMRR), acknowledging much higher prices than the current official rates.