The informal currency market in Cuba woke up to new increases: both the dollar and the euro are climbing steadily, approaching unprecedented thresholds, according to data released by elTOQUE at 6:30 AM on Saturday.
Compared to Friday, the dollar rose by three Cuban pesos—from 690 to 693 CUP—bringing it just seven pesos shy of the psychological barrier of 700 CUP. Meanwhile, the euro climbed five pesos—from 790 to 795 CUP—putting it only five pesos away from reaching 800 CUP. The freely convertible currency (MLC) also gained five pesos, reaching 505 CUP.
The Rapid Rise of Foreign Currencies
The rate at which foreign currencies have increased throughout June has been startling. The dollar began the month at 585 CUP, accumulating a rise of 108 pesos in just twenty days, which translates to over an 18% increase.
The euro started at 645 CUP on June 1st and has soared 150 pesos during the same timeframe, representing a more than 23% increase.
Chronicle of a Swift Climb
The progression over the month illustrates a relentless acceleration with no real pauses. On June 6th, the dollar stood at 615 CUP; by June 9th, it had reached 630 CUP—a level where the Observatorio de Monedas y Finanzas (OMFi) of elTOQUE had predicted a ceiling of 650 CUP for the entire month. That barrier was shattered on June 12th, 18 days ahead of schedule.
Since then, the American currency has shown no signs of slowing down: 660 CUP on June 14th, 670 on June 16th, 680 on June 17th, 685 on June 18th, and 690 on Friday, before hitting 693 CUP this Saturday.
Government Measures Fail to Inspire Confidence
The announcement of 176 economic measures by Prime Minister Manuel Marrero Cruz to the National Assembly on Friday—the most significant economic package since the Special Period, which includes private exchange houses—failed to alleviate pressure on foreign currencies: the informal market responded with further increases, not trust.
Public reaction on social media was overwhelmingly skeptical, with the question "Does anyone believe them?" being a common sentiment, as reported on Friday. Even Miguel Díaz-Canel acknowledged before the Assembly that "there are obstacles that do not come from outside or from the embargo."
The Disparity Between Informal and Official Rates
The gap between the informal market and official rates is staggering. The Central Bank of Cuba (BCC) sets the dollar at 573 CUP and the euro at 657 CUP through CADECA, meaning those buying dollars on the street pay more than 120 pesos above what the state acknowledges, as the state has no foreign currency to sell.
Economist Elías Amor warned that "no foreign currency will enter Cuba in the coming months" and that the fiscal deficit surpasses 12% of the GDP, potentially driving inflation to 30-40% if the structural imbalance isn't corrected. "The issue is that needs can be met with foreign currency, and people will be willing to pay anything for it," he pointed out.
Looking back historically, in 2020 the dollar was valued at about 42 CUP in the informal market; this Saturday it stands at 693 CUP, marking a loss of more than 95% of the peso's value over six years.
Understanding Cuba's Currency Crisis
Why are the dollar and euro increasing so rapidly in Cuba?
The rapid increase in the value of the dollar and euro is primarily due to the lack of confidence in the Cuban peso, exacerbated by the government's inability to stabilize the economy and a lack of foreign currency reserves.
What measures has the Cuban government taken to address the currency situation?
The Cuban government has announced 176 economic measures, including the introduction of private exchange houses, in an attempt to alleviate the currency crisis. However, these measures have not inspired confidence among the public or in the informal market.
How does the current exchange rate compare to historical values?
In 2020, the dollar was valued at about 42 CUP on the informal market. Currently, it is valued at 693 CUP, indicating a dramatic depreciation of the Cuban peso by more than 95% over six years.