The dramatic decline of the Cuban peso in the informal currency exchange market over the past year starkly illustrates its weakening against major foreign currencies.
Analysis reveals a continuous rise in the value of the euro, the U.S. dollar, and, to a lesser extent, the Freely Convertible Currency (MLC), coinciding with stagnant state salaries that have barely increased in real terms.
The euro presents the most striking example. Approximately a year ago, it was valued at around 350 Cuban pesos (CUP), but by March 8, 2026, it had surged to 580 CUP in the informal market.
This difference of 230 pesos per unit signifies a depreciation of approximately 65.7% for the Cuban peso against the European currency during this period.
The U.S. dollar also follows this trend. In March 2025, it was approximately 345 CUP, and it now stands at 510 CUP, marking an increase of about 165 pesos, or a 47.8% depreciation of the Cuban peso against the American dollar.
The MLC, however, has experienced a more erratic pattern. Initially around 280 CUP, it dropped over several months to a low of approximately 190 CUP by mid-2025, before rapidly recovering to its current level of around 400 CUP.
Compared to a year ago, this represents a rise of roughly 43%, although from its lowest point, the increase exceeds 110%, underscoring the market's significant volatility.
Over the past year, distinct phases have emerged. The first, from March to August 2025, saw a gradual peso decline against the dollar and euro.
In the second phase, from September to November, there was a rapid escalation with episodes of volatility and temporary downturns.
The third phase, from December 2025 to March 2026, solidified another upward surge, ending with foreign currencies at their highest levels of the period.
This foreign currency spike would be less impactful if incomes were rising at a comparable rate. However, the opposite is true: as the peso rapidly loses value, state salaries have barely grown in real terms.
Over the past year, the average salary in Cuba rose from approximately 5,839 CUP in 2024 to a range of 6,600-6,800 CUP in 2025, according to official data. This nominal increase of 15-18% falls far short of the peso's depreciation and inflation.
When these salaries are converted to the real value of the informal market, the situation appears even more troubling. With the dollar at around 510 CUP, the average salary equates to roughly 13 dollars per month, while the euro exchange rate yields just 11-12 euros.
A year ago, despite lower nominal salaries, the value in foreign currencies was slightly higher.
The outcome is a clear loss in purchasing power. Even the best-paid sectors—such as electricity, gas, and water, or construction—barely reach the equivalent of a few dozen dollars monthly, while sectors like trade or communal services remain at much lower levels.
The combination of the peso's accelerated devaluation and stagnant wages has created a true perfect storm for the Cuban people's finances.
As foreign currencies continue to rise in the informal market and the cost of living escalates, state incomes remain far from meeting the basic needs of the population.
The Impact of Currency Devaluation on Cuban Salaries
How has the decline of the Cuban peso affected the average salary?
The decline of the Cuban peso has severely impacted the purchasing power of the average salary, which, when converted at the current informal exchange rates, equates to only about 13 dollars per month.
What has been the trend of foreign currencies in the informal market?
Foreign currencies like the euro and the U.S. dollar have shown a continuous upward trend in the informal market, significantly outpacing the growth of state salaries in real terms.
Why is the devaluation of the peso problematic for Cuban citizens?
The peso's devaluation is problematic because it diminishes the real value of salaries, making it increasingly difficult for citizens to afford basic necessities as the cost of living rises.