This Friday, dollars, euros, and MLC saw a moderate decrease in their value in Cuba's informal market. At 7:00 a.m. (local time), the U.S. dollar was valued at 330 CUP, five pesos less than the previous day. The euro also dropped by five units, reaching 345 CUP after being valued at 350 for several days.
The decline in the Freely Convertible Currency (MLC) was more modest. The virtual currency used by the Cuban government fell by three pesos, standing at 290 CUP, still significantly lower than dollars and euros.
After 48 hours without fluctuations in the average selling price of currencies, the informal market responded on Thursday and Friday with a moderate decrease in the value of the three key currencies, triggered by the government's price cap on six basic products.
Current Exchange Rates as of 12/07/2024 - 7:10 a.m. in Cuba
USD to CUP exchange rate according to elTOQUE: 330 CUP.
EUR to CUP exchange rate according to elTOQUE: 345 CUP.
MLC to CUP exchange rate according to elTOQUE: 290 CUP.
The informal exchange rate provided here is not officially recognized or backed by any financial or governmental entity.
Cuban Government Caps Prices on Six Basic Products
The drop in the value of dollars, euros, and MLC this Friday follows the Cuban government's announcement on Monday of a price cap on six high-demand basic products, as stated in a resolution published in the Official Gazette.
Resolution 225/2024 from the Ministry of Finance and Prices outlines the capped products as follows: chopped chicken (680 pesos per kg), edible oils except olive oil (990 pesos per liter), powdered milk (1,675 pesos per kg), pasta (835 pesos per kg), sausages (1,045 pesos per kg), and powdered detergent (630 pesos per kg).
The regime presented the resolution as an effort to mitigate the impact of inflation on consumers. Additionally, the government eliminated customs duties on the importation of these products by the private sector. They indicated that the cap considers acquisition costs, commercialization, merchants' profit, and sales tax.
However, MIPYMES and some economists have criticized the announcement. The measure has been primarily criticized by businesspeople and economists, who warn of the negative consequences of price caps and suggest that the market should self-regulate through supply and demand.
Despite the criticism, the Ministry of Finance and Prices defends what it calls a "temporary regulation," arguing it is a measure to contain rising prices and inflation, without mentioning the potential shortages that could result from this policy.
Currency Equivalents in Cuban Pesos (CUP)
U.S. Dollar (USD) to Cuban Peso (CUP), as per exchange rates on Thursday, July 11:
1 USD: 330 CUP
5 USD: 1,650 CUP
10 USD: 3,300 CUP
20 USD: 6,600 CUP
50 USD: 16,500 CUP
100 USD: 33,000 CUP
Euros (EUR)
5 EUR: 1,725 CUP
10 EUR: 3,450 CUP
20 EUR: 6,900 CUP
50 EUR: 17,250 CUP
100 EUR: 34,500 CUP
200 EUR: 69,000 CUP
500 EUR: 172,500 CUP
In March, Miguel Díaz-Canel promised a package of economic measures to "correct distortions and re-energize the economy." He mentioned that prices would remain high but assured that "abusive or speculative prices" would not be allowed.
Understanding the Impact of Currency Fluctuations in Cuba
In light of the recent changes in the value of dollars, euros, and MLC in Cuba's informal market, here are some key questions and answers to help understand the situation better.
Why did the value of dollars, euros, and MLC drop in the informal market?
The value of these currencies dropped due to the Cuban government's recent implementation of a price cap on six essential products, which influenced the informal market.
What are the new exchange rates for USD, EUR, and MLC in Cuba?
As of July 12, 2024, the exchange rates are 330 CUP for USD, 345 CUP for EUR, and 290 CUP for MLC, according to elTOQUE.
Which products have been affected by the government's price cap?
The products affected include chopped chicken, edible oils (excluding olive oil), powdered milk, pasta, sausages, and powdered detergent.