The informal currency market in Cuba has kicked off the week with a significant jolt: the Freely Convertible Currency (MLC) has surged to 350 Cuban pesos (CUP), setting a historic record and underscoring its role as a barometer of the ongoing economic crisis.
Simultaneously, the U.S. dollar (USD) and the euro (EUR) have held steady at rates of 440 and 480 CUP, respectively.
This spike in the MLC reflects widespread mistrust in the government's monetary policies and the lack of real cash access, despite the Central Bank of Cuba's (BCC) introduction of a new official floating exchange rate system on December 18.
The Reality of Cuba's Informal Exchange Rates
As of Monday, December 22, 2025, the exchange rates stand as follows: USD to CUP at 440, EUR to CUP at 480, and MLC to CUP at 350. The rise in the digital currency, used in state-run foreign currency stores, comes amid persistent cash shortages, rampant inflation, and uncertainty surrounding the new exchange system.
Although the BCC has presented the floating rate as a reform aimed at reflecting actual market conditions, it has yet to make a tangible impact on the general population.
Challenges in Accessing Foreign Currency
Restrictions on purchasing foreign currency through banks and CADECA, along with limited availability of dollars and euros, have driven demand towards the MLC, which is now trading at unprecedented levels.
According to state exchange houses as of December 21, the selling rates were 1 USD = 432.48 CUP and 1 EUR = 506.52 CUP. These figures highlight that the so-called “floating rate” does not truly compete with the informal market but rather imitates and legitimizes it.
Speculation and Economic Distrust
Each time President Miguel Díaz-Canel's government announces a new economic measure—such as monetary reform or the floating rate—the informal market reacts by anticipating a devaluation of the Cuban peso. Currency traders, small business owners, and those holding foreign currency prefer to hold onto their assets, foreseeing price hikes. This speculation, coupled with inflation fears and cash shortages, drives the MLC's value upward faster than other currencies, making it the most sensitive indicator of economic distrust.
On social media, the release of the official rates has sparked a wave of criticism and irony. “They criticized Toque so much, only to end up the same,” one user remarked, referring to the independent portal that has long set the informal market benchmarks. Others lamented that “they publish figures, but no one can buy,” pointing to the practical impossibility of accessing foreign currency in Cuban banks.
The Illusory Floating Rate
The three-tier system—1x24 for state operations, 1x120 for companies with external income, and a floating rate for citizens and microenterprises—has not addressed market distortions. In essence, the rate “floats” on paper but remains unchanged against the backdrop of shortages and a lack of circulating dollars.
Meanwhile, the Cuban peso continues to lose its purchasing power. With average salaries around 4,000 CUP per month, equivalent to less than 10 USD at the informal exchange rate, Cubans rely on remittances, digital payments, and exchange networks to make ends meet.
Conclusion: The Dominance of the Informal Market
The rise of the MLC to 350 CUP is not an isolated incident but a direct outcome of a monetary policy lacking credibility and a banking system crippled by currency scarcity. The BCC's “floating rate” aims to project state control over monetary and exchange policy but essentially acknowledges the dominance of the parallel market, which the regime previously deemed illegal.
As long as the state maintains control over currency supply and fails to establish a true exchange market, the Cuban peso will continue its decline, and the MLC—created by the regime itself—will keep setting the real economic price on the streets.
FAQs About Cuba's Current Economic Situation
Why is the MLC experiencing a record high in Cuba?
The MLC is reaching record highs due to widespread distrust in government monetary policies and a scarcity of accessible foreign currency, despite the introduction of a new floating exchange rate system.
How do the official and informal exchange rates in Cuba differ?
Official exchange rates are set by the government and often do not reflect the actual market conditions, leading to a disparity with informal rates, which are driven by real supply and demand dynamics.
What impact does the floating exchange rate have on everyday Cubans?
The floating exchange rate has had little tangible effect on everyday Cubans, who continue to face cash shortages and rely on informal markets for currency exchange.