Pedro Monreal, a renowned Cuban economist, has examined the recent decline of the US dollar in Cuba's informal market, noting a 4% decrease in just three days. He suggests this may be related to the anticipation of increased remittances following Hurricane Melissa.
In a post on X, Monreal elaborated that natural disasters often lead to a temporary spike in remittances to Caribbean nations, which might have contributed to the recent weakening of the USD against the CUP.
"Various factors could have influenced the 4% drop of the USD against the CUP in three days in the informal market. A working hypothesis is that the expectation of an increase in remittances, which is common in Caribbean countries after natural disasters, might have intensified the decline of the USD," Monreal wrote.
His remark sparked responses among platform users, such as @arcamachoX, who argued that remittances' impact "doesn't usually transfer so quickly" to the Cuban informal market and that market volatility might be a more immediate cause.
Monreal responded by clarifying that his hypothesis did not suggest an immediate effect but rather a potential influence among a broader set of factors.
"The hypothesis is not that a potential increase in remittances has already affected the rate but that it could. The current downward movement is due to various factors, including subjective ones, and is part of a long-term downward trend due to economic deterioration," the economist explained.
The account @arcamachoX criticized the platform elToque for not "quantifying the sample size in its report."
Regarding this, they added, "When five provinces are disconnected due to force majeure, you must have a significant geographical bias in your data. The trend of the CUP depreciation has never been downward."
Monreal succinctly replied, "Good observation."
Another factor that should be considered is the possibility of a social media campaign to artificially create a supply of dollars at reduced prices.
The recent dollar decline occurs amid prolonged economic tension in Cuba, where the informal market remains the primary reference for the real value of the Cuban peso (CUP).
The prices of currencies, especially the dollar and the euro, fluctuate based on cash availability, remittances, private import demands, and social expectations.
On this matter, Cuban Foreign Minister Bruno Rodríguez Parrilla recently issued a strong accusation against the informal currency market, attributing it to a coordinated campaign from the United States aimed at provoking an economic crisis in Cuba.
According to the official, it is a deliberate "destabilization" strategy, resorting to exchange rate speculation, psychological manipulation, and illicit financing through US federal resources.
The accusation, published this Saturday on his official X account, has stirred reactions, reigniting the debate about the causes of inflation and the depreciation of the Cuban peso.
Understanding Cuba's Economic Fluctuations
How do natural disasters impact remittances in the Caribbean?
Natural disasters often lead to a temporary increase in remittances as families abroad send more money to support recovery efforts in affected Caribbean countries.
Why is the informal market significant for Cuba's economy?
The informal market in Cuba is a primary indicator of the real value of the Cuban peso (CUP), reflecting true currency exchange rates and availability outside of official channels.
What are the alleged causes of Cuba's economic instability?
Cuba's economic instability is attributed to multiple factors, including market volatility, speculation, and alleged external campaigns aimed at destabilizing the economy.