Cuban Government Sets World Record for Currency Devaluation in 2025

On December 18, the Central Bank of Cuba (BCC) announced a new exchange rate of 1 USD = 410 CUP and 1 EUR = 481.42 CUP. This move marks a staggering 242% devaluation of the Cuban peso from the previous rate of 1x120.

Economist Pedro Monreal described this as “the largest official currency devaluation globally in 2025,” setting a record that places Cuba at the top of a list no country desires to lead.

Devaluation by Decree: A Historic Moment

This decision, framed by the regime as part of its “currency market transformation,” represents an immediate loss of over two-thirds of the Cuban peso's nominal value. Although the official rate was previously 120 pesos per dollar, in practice, the state had already acknowledged the informal rate to set internal trade and import prices.

Monreal emphasized that the currency had already been devalued by the market itself: “The Central Bank is merely formalizing what the real economy determined months ago.” Essentially, this isn't a technical adjustment but a belated acknowledgment of monetary collapse.

Official Devaluation vs. Market Devaluation

In economic terms, an official devaluation occurs when a government deliberately lowers the value of its currency relative to others. In contrast, a market devaluation happens naturally, driven by supply and demand, inflation, or lack of confidence.

In Cuba, both devaluations have been proceeding simultaneously for years. The informal market had already set the dollar at 440 CUP and the euro at 480 CUP before the announcement. With insufficient reserves or foreign currency, the government merely legalized the disaster.

International Comparisons

In 2025, several currencies have depreciated, yet none to the extent of the Cuban peso. The Iranian rial lost about 50% of its value against the dollar, and the Lebanese pound, one of the world's most unstable currencies, devalued by 60%.

Meanwhile, the Indonesian rupiah and Vietnamese dong weakened, but by less than 15%. Cuba's single-day collapse of 242% surpasses any global standard. No recognized economy has faced such an official devaluation in 2025.

Acknowledging the Failure

With this measure, the regime seeks to establish a more realistic “floating rate” and attract foreign currency through legal channels. However, the fundamental issue remains: there is no trust, no dollars, and no production.

The devaluation is not a sign of recovery but a public admission of the Cuban peso's downfall. The government may alter the numbers, but street reality dictates the currency's value.