The value of the U.S. dollar and the euro climbed once again this Thursday in Cuba's informal market, continuing an upward trend that has persisted for over two weeks. This phenomenon highlights the worsening state of the nation's economy amid a severe energy crisis.
According to the reference rate published by elTOQUE, the dollar started the day at 650 Cuban pesos (CUP), marking an increase of 10 pesos from the previous day.
The euro also rose by 10 CUP, reaching 740 pesos, thus widening the gap with the U.S. currency to 90 pesos.
The only outlier is the Freely Convertible Currency (MLC), which dropped by 25 pesos to 425 CUP, displaying erratic behavior compared to the steady rise of the dollar and euro.
The informal market has now seen more than 15 consecutive days of the Cuban peso's depreciation, a pattern that aligns with the worsening energy crisis, extended power outages, and the relentless scarcity of basic goods.
The Impact of the Energy Crisis
For many Cubans, the dollar and euro have become safe havens against the continuous decline in the national currency's value. Each prolonged blackout and every sign of production deterioration fuels the demand for foreign currency, further straining informal market rates.
The current energy situation is among the most challenging in recent years. Electrical generation deficits have become routine: the nighttime shortfall surpassed 1,890 MW this Thursday, affecting households and economic activities while exacerbating supply problems.
Structural Issues Fueling Currency Surge
The rising cost of foreign currency acts as a barometer of public confidence. As doubts about the economy's recovery grow, so does the pressure on the dollar and euro.
The rapid depreciation of the peso stems from unresolved structural issues: chronic foreign exchange shortages, low tourism sector performance, declining exports, lack of productive investment, and monetary expansion unsupported by national production.
In March 2026, Cuba's Central Bank introduced 2,000 and 5,000 peso bills, a move justified by authorities as necessary to facilitate cash transactions. Many economists, however, view this as an implicit admission of inflation's impact and the peso's diminishing purchasing power.
Since 2020, the peso has lost over 95% of its value against the dollar in the informal market, plummeting from around 42 CUP per dollar to the current 650 CUP.
Cuban economist Elías Amor recently warned that the dollar could approach 1,000 pesos if macroeconomic imbalances persist. The Observatory of Currencies and Finance of Cuba (OMFi) has cautioned that further economic isolation might lead to increased restrictions on foreign currency inflows, reduced availability of imported goods, and additional inflationary pressures.
The new thresholds breached by the dollar and euro not only reflect currency behavior but also portray the deepening economic and energy crisis that continues to hit Cubans hard in their wallets.
FAQs on Cuba's Currency and Energy Crisis
Why are the dollar and euro rising in Cuba?
The dollar and euro are climbing in Cuba due to the depreciation of the Cuban peso in the informal market, exacerbated by the ongoing energy crisis, economic instability, and lack of confidence in the national currency.
What is causing the energy crisis in Cuba?
Cuba's energy crisis is primarily due to significant electrical generation deficits, which have led to frequent power outages affecting both households and economic activities.
How has the peso performed against the dollar since 2020?
Since 2020, the Cuban peso has lost over 95% of its value against the dollar in the informal market, with rates falling from around 42 CUP per dollar to 650 CUP today.
What are some structural issues affecting Cuba's economy?
Key structural issues include chronic foreign exchange shortages, low tourism performance, declining exports, insufficient productive investment, and monetary expansion not backed by national production.