Cuban Banking Conundrum: The Struggle of Private Actors, Financial Reforms, and a Devalued Peso

In a bid to spur economic change, Cuban leader Miguel Díaz-Canel has declared his intention for the banking sector to become a catalyst for transformation, restore public trust, and reinstate the currency's fundamental roles. However, these ambitions are voiced amidst a period of steep depreciation for the Cuban peso, with the informal market continuing to dictate exchange rates.

During a visit to the Central Bank of Cuba (BCC) and various financial entities, Díaz-Canel laid out his vision. This visit was covered by Granma on November 4 under the headline, “The Cuban banking and financial sector must drive the country's economic and social transformation.” Yet, these declarations coincide with a time when the national currency is losing value, and the gap between official and street market rates remains significant.

Juana Lilia Delgado Portal, president of the BCC, acknowledged service quality issues, cash withdrawal queues, power outages, and connectivity failures. She emphasized the importance of opening up the financial system, extending credit, and developing exchange markets. Despite these announced reforms, the peso's devaluation continues, and the disparity between official and informal market rates remains notable.

On November 7, CiberCuba's independent index set the dollar at 933 Cuban pesos (CUP) and the euro at 1,010 CUP. Meanwhile, the BCC's official Segment III rates were at 800 CUP per dollar and 892 per euro. The decline has accelerated in recent months. According to the Money and Finance Observatory (OMFi) from elTOQUE, the informal dollar rate rose from 750 CUP at the end of September to 880 by late October, a 17.3% increase in just one month. In November, rates surged past 900 pesos.

Private Exchange Houses: Market-Driven Pricing

In June, the government announced 176 economic changes, permitting private banks, non-bank financial institutions, private exchange houses, and new remittance operators. This policy shift breaks with decades of state monopoly, but its potential to stabilize the peso remains uncertain.

A notable example emerged in September with the opening of ADT64, the first authorized private exchange house in Santa Clara. Initially, it posted a rate of 710 CUP to buy dollars and 730 to sell them, while the informal market hovered around 700 and the official rate was near 655. Despite initially only buying foreign currency, this new private operator's rates were much closer to the street prices than those set by the authorities.

Economist Pedro Monreal pointed out this contradiction, warning that the entry of private operators doesn't guarantee a reduction in dollar prices. The Central Bank itself confirmed using data from ADT64 operations to base its official Segment III rate, illustrating how the state began incorporating prices from private transactions into a market it sought to control administratively.

Challenging the Official Narrative of the Informal Rate

The government's approach becomes even more contradictory considering its long-standing campaign against elTOQUE, an independent outlet that publishes the Informal Market Representative Rate (TRMi). For years, government officials and state media accused the project of artificially manipulating the peso's value and engaging in an alleged economic warfare campaign promoted by the United States.

In November 2025, the Central Bank publicly backed these allegations, stating that elTOQUE's rate "cannot serve as a valid reference" due to its distortion of signals. The offensive included accusations of currency trafficking and tax evasion, along with threats of criminal investigations and public exposure campaigns against the outlet's members. Spokesperson Humberto López even accused the independent media of "financial terrorism."

However, economic studies have provided evidence supporting the usefulness of elTOQUE’s metrics. In June 2025, economist Pavel Vidal examined a historical series of the informal market utilized by the Ministry of Economy during an official presentation. Comparing it to elTOQUE's data revealed a 95% correlation between the variations of both series during 2021-2023. While there were differences in absolute rates, their trajectories were remarkably similar.

The methodology of elTOQUE, based on the statistical processing of buy-sell ads, was also scrutinized in a study published in the academic journal Applied Economics. These findings don't imply that all real transactions occur at published prices, nor that statistical references are infallible. But they challenge the official thesis that the peso's depreciation is primarily due to informational manipulation.

Initial rates from ADT64 provide additional evidence: when an authorized operator needs to attract foreign currency, its prices may align closely with the informal market the government has sought to delegitimize.

The Real Drivers Behind the Dollar's Rise

The recent surge in the dollar's value stems from economic factors far beyond the dissemination of exchange rates. According to a report by the OMFi on November 5, traditional demand for foreign currency is now compounded by increased business pressure to import fuels, solar panels, equipment, and other supplies.

The observatory suggests that some of this demand could be funded with pesos accumulated in business accounts, intensifying competition for a limited foreign currency supply. This is a factor whose full impact has yet to be measured.

Additionally, low domestic production, fiscal imbalances, partial dollarization, and loss of confidence in the peso as a savings instrument exacerbate the situation. Under these conditions, the introduction of private banks and exchange houses doesn't eliminate the need for a monetary policy capable of stabilizing prices and ensuring a sufficient supply of foreign currency.

The paradox in Díaz-Canel's rhetoric lies in the government's call for a modern, reliable banking system while failing to address the economic imbalances fueling monetary depreciation. As authorities attempt to regain control over the exchange market through private operators, the evolution of exchange rates underscores an uncomfortable reality: the dollar's price is determined not by the outlet publishing it but by the supply, demand, and confidence conditions of an economy still struggling to find stability.