The value of the dollar and euro continues to climb in Cuba, hitting new highs in the informal market. As of this Wednesday, the U.S. dollar marks a full week of consecutive increases, now valued at 482 CUP, up four pesos from the previous day. Since October 16th, the dollar has gained 22 pesos.
The euro is also experiencing a sharp rise, jumping five pesos to reach 535 CUP per unit. Meanwhile, the Freely Convertible Currency (MLC) remains steady at an average of 200 CUP. As of October 22, 2025, at 6:10 a.m. in Cuba, the exchange rates according to elTOQUE are: 482 CUP per USD, 535 CUP per EUR, and 200 CUP per MLC.
Financial Havens in a Time of Inflation
The October report from Cuba's Observatory of Currencies and Finance (OMFi) highlights a growing trend among Cubans to seek refuge in strong currencies. This shift is driven by the need to guard against inflation, conduct business, or simply survive. The OMFi anticipates that should current conditions persist, the dollar might surpass 500 CUP by the end of the month. Similarly, the euro could rise to 551 CUP, and the MLC might reach approximately 215 CUP.
Economic Pressures and Currency Demand
Cuba's dwindling national production, exacerbated by an energy crisis and a shortage of resources, is forcing small and medium-sized enterprises to source materials from abroad, thereby increasing their demand for foreign currency. This has intensified competition in the informal market among businesses, consumers, and traders. Additionally, there's a notable capital flight and an increased use of cryptocurrencies or foreign accounts to safeguard earnings. Such trends are fueled by growing distrust in the government's ability to implement stabilizing policies.
The Peso's Decline and Tourism's Impact
The excessive circulation of pesos, lacking productive backing, combined with the failure of the banking process, has spurred an immediate conversion of pesos into foreign currencies. The lack of confidence in the national currency and the belief that the crisis won't resolve soon reinforce this defensive behavior. Speculation has accelerated as many perceive the peso's value is dropping continuously.
Moreover, the persistent downturn in tourism has severely impacted the influx of fresh currency into the country. Fewer dollars entering through tourism exacerbate the imbalance between the supply and demand for foreign exchange. On October 22, the conversion rates were: 1 USD equaled 482 CUP, and 1 EUR equaled 535 CUP, with larger denominations following suit.
Amidst these economic challenges, Cubans are left questioning the fate of the "floating rate" that Manuel Marrero proposed at the end of 2024 to close the gap between the official and informal currency values.
FAQs on Cuba's Currency Situation
Why are the dollar and euro increasing in value in Cuba?
The rise in the dollar and euro's value is due to Cuba's economic struggles, including inflation, a lack of trust in the national currency, and increased demand for foreign currencies in the informal market.
What is causing the increased demand for foreign currency in Cuba?
The increased demand is driven by the need for businesses to import materials due to declining national production, and individuals seeking to protect their finances against inflation and currency devaluation.
How has the decline in tourism affected Cuba's economy?
The decline in tourism has reduced the inflow of foreign currencies, worsening the gap between currency supply and demand, and further straining Cuba's economic situation.