The informal currency exchange market in Cuba continues to exhibit signs of volatility, as the exchange rate for the Freely Convertible Currency (MLC) sees a surprising new surge. On Sunday, February 16, 2025, the value of the MLC reached 250 Cuban pesos (CUP), reinforcing an upward trend following weeks of relative stability amid the uncertainty surrounding this currency due to the partial dollarization of the economy initiated by the Cuban regime.
Exchange Rates in Cuba
Sunday, February 16, 2025 - 08:00
Exchange rate of the US dollar (USD) to Cuban pesos (CUP): 340 CUP
Exchange rate of the euro (EUR) to Cuban pesos (CUP): 345 CUP
Exchange rate of the MLC to Cuban pesos (CUP): 250 CUP
Meanwhile, both the US dollar (USD) and the euro (EUR) have maintained their values in the informal market, trading at 340 CUP and 345 CUP, respectively, as reported by the independent media outlet elTOQUE.
The rise in the MLC comes just 48 hours after its last reported increase on CiberCuba, which noted a rate of 246.50 CUP on February 14. Despite many predicting its imminent demise, the MLC continues to surprise with its upward trajectory, stirring confusion regarding its future viability.
This latest increase has once again sparked astonishment and questions, especially since opportunities for Cubans to conduct transactions with this type of card have been increasingly restricted in recent weeks. Such movements in Cuba's informal currency market highlight ongoing doubts about the Cuban regime's economic and monetary policies as it moves towards a declared dollarization of its sales, using cash or cards such as VISA, MasterCard, and the government-operated Clásica.
Understanding the MLC and Its Impact on Cuba's Economy
What is the MLC and why is it significant in Cuba?
The MLC, or Freely Convertible Currency, is a type of currency in Cuba used in specific state-operated stores. Its significance lies in its role as part of the government's efforts to partially dollarize the economy, allowing transactions in currencies other than the Cuban peso.
Why is the MLC's exchange rate rising?
The MLC's exchange rate is rising due to a combination of factors, including limited availability and increasing demand in the informal market. This reflects broader economic uncertainties and the effects of partial dollarization policies by the Cuban government.
How does the MLC affect everyday life for Cubans?
For many Cubans, the MLC represents a complex aspect of daily financial transactions, as it is required for purchases in certain stores. The currency's fluctuating value can impact their purchasing power and access to essential goods.