Cubans Criticize New Floating Exchange Rate as Move Deepens Economic Struggles

The recent announcement by the Central Bank of Cuba introducing a floating exchange rate has triggered an outpouring of reactions across social media, characterized by humor, confusion, and anger. While the government has positioned this measure as a strategy to "strengthen the Cuban peso," the public response reflects a blend of skepticism and resignation, with many interpreting it as the formal acknowledgment of the informal market.

Starting December 18, Cuba operates under three exchange rate segments: one set at 1x24 for essential state services, another at 1x120 for entities with external revenue, and a "floating" rate for citizens and private enterprises, initially set at 410 pesos per dollar and 481.42 per euro. These figures, mirroring those in the informal market, sparked surprise and irony, even in official forums.

Public Reactions and Confusion

On the Central Bank of Cuba's Facebook post, users expressed confusion over the measure's implementation. Questions arose such as, "Are there three types of dollars?" and "Does this mean I can buy unlimited dollars at 410 from the bank?" Others focused on the disparities between rates, asking, "Where does the MLC fit in?" or "Why is the euro priced higher than the 'Toque'?"

Some commentators attempted to rationalize the change by comparing it to foreign systems: "China and Russia have similar setups, but their governments allow free production," remarked one user, advocating for Cuba's economic adaptation to modern times. Yet, skepticism was widespread: "I don't get it, they say it's a floating rate but there's no freedom to buy or sell," noted another comment. Even on Cubadebate, where official narratives were more prevalent, doubts lingered: "Without currency reserves, what's the point of the rate?"

Criticism of Government Actions

The tone was equally critical on CiberCuba. "It's just like 'El Toque' under a different guise," a user wrote, referencing the independent outlet that had been reporting informal rates. Several echoed this sentiment, highlighting the similarities between the new state system and the previously criticized informal market. One user jokingly remarked, "Now we've got our own 'Toque,' and we're the ones ruining our economy."

The close resemblance to the informal market fueled collective sarcasm. Comments like "So much criticism of 'El Toque' to end up the same" were ubiquitous, with others summarizing, "It's the same thing with a new logo." Discussions also touched on inequality: "Those who exchange at 1x24 are the elite; the people, with the floating rate, will continue to suffer."

Questions of Transparency and Viability

Concerns over transparency were also voiced: "Who decides which segment you belong to?" one person inquired, while another added, "The government doesn't compete with the market; it merely imitates it." Frustration was evident: "A doctor earns $13 a month; with this rate, that's the lowest salary in history."

The contradiction between official rhetoric and economic reality was a frequent theme. "They spent a month discrediting 'El Toque' only to end up just like them," noted a widely liked comment, with another summing up, "Cuba's problem isn't the rate; it's the system that controls and punishes those trying to succeed."

Confusion was a common thread in many comments. Even those hopeful about the announcement were cautious. "Hopefully it works, but if prices don't drop and production doesn't increase, the rate doesn't matter," stated a participant on Cubadebate. "This only makes everything more expensive," added another on the Central Bank's page.

"Every new measure is just an old lie with a different name," one user lamented. "We don't lack diagnoses; we lack the willingness to change the system," said another. Resignation mixed with irony: "I have five dollars, sell them at 24, buy at 410, and become a millionaire... backwards."

This new three-rate system — 1x24, 1x120, and floating — represents a redesign the government describes as "gradual and temporary." Yet, the Central Bank admitted it "isn't what many expected," with official data showing the average salary of 6,685 pesos amounts to just $16 per month at the current rate. On December 18, the first day of the floating rate, the informal market remained unchanged, with the dollar at 440 CUP and the euro at 480 CUP.

For citizens, the policy does little to alter daily life: cash shortages, endless lines, and unaffordable prices persist. "If banks can't afford payrolls, how will they exchange euros?" one user questioned on the official post. Meanwhile, others joked online: "Now we truly have a floating rate... because everything floats except wages."

The collective reactions paint a picture of a weary nation, where humor remains a sanctuary amidst uncertainty. None of the three rates seem capable of restoring faith in the Cuban peso. Amidst the confusion and mockery, a consistent theme emerged: the Central Bank has essentially become its own "Toque," by legitimizing the informal market values it once criticized.