The Central Bank of Cuba (BCC) has once again made a strategic move. After remaining largely stagnant at around 458 CUP per dollar in the official Segment III, the so-called "floating rate" experienced a jump to 463 CUP on February 21, mirroring the informal dollar's consolidation at 505 CUP.
A recent chart from the BCC itself illustrates this pattern clearly: there was a nearly flat stability between February 13 and February 19, followed abruptly by a steep adjustment within hours.
This is not a natural float driven by transparent supply and demand, but rather an administrative correction in response to real market movements.
The existing gap remains notable. With the informal dollar at 505 CUP and the official rate at 463 CUP, the difference hovers around 42 pesos.
In the parallel market for the euro, it stands at 560 CUP, while Segment III sets it at 544.67 CUP, displaying a slight drop of 0.42 CUP compared to the previous day. Although the euro's disparity is narrower than that of the dollar, it still highlights two exchange rate references that fail to converge.
A historical analysis of Segment III data reveals a clear trend: long periods of stability interrupted by more pronounced adjustments. There is no evidence of a gradual path or a truly floating behavior, but rather a series of abrupt shifts.
Whenever the informal market crosses a threshold—such as the recent 500 CUP—the monetary authority reacts days later by partially adjusting the official rate.
This reactive approach carries several implications. Firstly, it sends mixed signals: the government claims that the official rate aims to regulate the market, yet in practice, it ends up following it.
Secondly, it fails to bridge the gap, perpetuating incentives to turn to the informal circuit, where liquidity and availability are greater.
Furthermore, the delayed correction undermines credibility. If Segment III were truly guided by market conditions, movements would be more frequent and less abrupt.
Instead, the data indicates discretionary decisions aimed at narrowing the gap without explicitly acknowledging the parallel market's leadership.
As the informal dollar consolidates at historic highs and the euro remains at its peak for the year, the BCC appears caught between the need to not fully validate the real market price and the impossibility of ignoring it.
The result is a "floating" rate that floats both late and partially, confirming that the effective reference remains outside the official system.
Understanding Cuba's Exchange Rate Dynamics
Why does the Central Bank of Cuba adjust its exchange rate?
The Central Bank of Cuba adjusts its exchange rate in response to movements in the informal market, attempting to reduce the disparity between official and unofficial rates.
What is the current gap between the official and informal exchange rates?
The current gap between the official and informal exchange rates is approximately 42 pesos, based on the recent rates of 463 CUP and 505 CUP, respectively.
How does the informal market affect currency exchange in Cuba?
The informal market significantly influences currency exchange in Cuba by offering rates that often reflect real market conditions more accurately than official rates, affecting liquidity and availability.