For the second consecutive day, the selling price of the US dollar has seen a decline in the informal market of Cuba. In the past few hours, the dollar's value has fallen to 320 CUP, which is a decrease of two pesos compared to its rate on Thursday. Over a span of just 48 hours, the dollar has dropped by five units. This trend is largely attributed to the Cuban government's recent announcement regarding the implementation of a more flexible official exchange rate by 2025, aimed at aligning with the market's supply and demand dynamics.
As for the euro, it remains steady at 330 CUP, a rate achieved the previous day. Similarly, the Freely Convertible Currency (MLC) has not changed, holding at 265 CUP. The regime's announcement of a so-called "floating exchange rate," although lacking specific details and an implementation date, is intended to regulate the currency exchange market. This is particularly crucial in an environment where the informal currency market sets the actual prices for goods consumed by the Cuban population.
Exchange rates as of December 20, 2024, 8:08 a.m. in Cuba:
- Dollar to CUP according to elTOQUE: 320 CUP.
- Euro to CUP according to elTOQUE: 330 CUP.
- MLC to CUP according to elTOQUE: 265 CUP.
Government's Strategy to Regulate the Currency Market
On Wednesday, the Cuban government declared its plan to implement a flexible official exchange rate, influenced by the principles of supply and demand. This move is an attempt to rival the informal market, which largely determines the true value of the Cuban peso.
This strategy is part of a partial dollarization of the economy, impacting key sectors such as wholesale and retail trade, tourism, and foreign commerce. Additionally, it will allow the use of cash dollars in areas like pharmacies, airports, and agricultural producers who export goods.
With an economy plagued by inflation and previous economic policies deemed unsuccessful, the regime is striving once more to regain control over a scenario where the informal market dictates the economic reality for most Cubans.
Currency Equivalents
Here are the current equivalents of US dollar and euro denominations to Cuban pesos (CUP) based on the exchange rates of December 20:
- $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
For euros, valued at 330 CUP per euro:
- 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
Understanding Cuba's Currency Market Changes
Why is the dollar's value dropping in Cuba?
The decline in the dollar's value is associated with the Cuban government's recent announcement about adopting a more flexible official exchange rate by 2025, which is expected to be more responsive to market supply and demand.
What sectors will be impacted by Cuba's new currency strategy?
The new currency strategy will affect strategic sectors such as wholesale and retail trade, tourism, and foreign commerce, and it will also allow the use of cash dollars in areas like pharmacies and airports.