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Currency Stagnation Hits Cuba's Informal Market

Sunday, August 11, 2024 by Alex Smith

Currency Stagnation Hits Cuba's Informal Market
50-dollar bill and 50-euro bill (Reference image) - Image © Freepik

Foreign currencies experienced another day of stagnation in their exchange rates within Cuba's informal market this Sunday. As of 7:00 a.m. local time on August 11, the U.S. dollar remains valued at an average of 320 pesos, while the euro continues to hold steady at 330 CUP.

The U.S. dollar has now gone nine consecutive days without any fluctuation in its price. It reached 320 CUP on August 3, and since then, classified ads monitoring its price in the informal market have shown no movement, according to elToque.

The euro has also shown no variation for a week, maintaining its value at 330 CUP since it hit that mark on August 5. In recent days, only the Freely Convertible Currency (MLC) has shown any change, experiencing two consecutive days of decline. However, as of yesterday, it joined the trend of "stability" and is currently valued at 275 CUP.

Current Exchange Rates in Cuba

As of 7:33 a.m. on August 11, 2024, here are the exchange rates in Cuba according to elToque:

USD to CUP: 320 CUP

EUR to CUP: 330 CUP

MLC to CUP: 275 CUP

What's Behind the Currency Stagnation?

"The dollar is like Cuba; it wants to move forward but can't," joked one internet user, while another lamented, "if it stops, how do we eat?" Some attribute the stagnation to the lack of flights to Nicaragua, a significant source of demand for hard currency in cash. Others believe that those holding dollars prefer not to lower the price and would rather keep them.

There are also questions about whether these figures truly represent a halt in currency prices in Cuba, or if recent threats from the regime have led to a shift in strategy in the informal buying and selling of key currencies, particularly the dollar and the euro.

It's important to note that this recent stability in the informal market comes shortly after an article in Granma threatened Cubans with up to five years in prison for engaging in street currency transactions. "These actions are punishable by imprisonment from two to five years, or a fine ranging from five hundred to one thousand quotas, or both," stated the official source, which also noted that any sale, transfer, transmission, or acquisition of foreign currency is "illegal and constitutes a crime."

Below are the equivalent values of each available bill of euros and U.S. dollars in Cuban pesos (CUP) as of August 10:

U.S. Dollar (USD) to Cuban Peso (CUP):

1 USD = 320 CUP

5 USD = 1,600 CUP

10 USD = 3,200 CUP

20 USD = 6,400 CUP

50 USD = 16,000 CUP

100 USD = 32,000 CUP

Euros (EUR):

1 EUR = 330 CUP

5 EUR = 1,650 CUP

10 EUR = 3,300 CUP

20 EUR = 6,600 CUP

50 EUR = 16,500 CUP

100 EUR = 33,000 CUP

200 EUR = 66,000 CUP

500 EUR = 165,000 CUP

Understanding the Currency Stagnation in Cuba's Informal Market

In light of the recent stability in currency values within Cuba's informal market, many are left with questions about the causes and implications. Here, we address some of the most pressing inquiries.

Why have the USD and EUR exchange rates remained stable?

The stability in exchange rates for the USD and EUR is attributed to various factors including limited flights to Nicaragua and a preference among holders of hard currency to retain their assets rather than sell at lower prices.

What impact do government threats have on informal currency trading?

Recent government threats, including potential prison sentences and fines for unauthorized currency transactions, have likely led to a more cautious approach among traders in the informal market.

What is the current exchange rate for the Freely Convertible Currency (MLC)?

As of the latest update, the exchange rate for the Freely Convertible Currency (MLC) is 275 CUP.

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