This past Saturday, Cuba's unofficial currency market experienced historic highs once again. The U.S. dollar soared to 655 Cuban pesos (CUP), the euro climbed to 750 CUP, and the freely convertible currency (MLC) reached 440 CUP, as per the latest data available.
These figures underscore a relentless upward trajectory that began on June 5, when the dollar was valued at 610 CUP and the euro at 690 CUP. Within just eight days, the dollar has surged by 45 CUP, representing a 7.4% increase, while the euro has risen by 60 CUP, or 8.7%, witnessing ongoing daily hikes.
Escalating Exchange Rates and Economic Woes
The acceleration in exchange rates is particularly alarming. On Wednesday, the dollar stood at 635 CUP, climbed to 640 CUP on Thursday, 650 CUP on Friday, and then reached 655 CUP by Saturday. Similarly, the euro followed suit: 720 CUP on Wednesday, 730 CUP on Thursday, 740 CUP on Friday, culminating at 750 CUP on Saturday.
This rapid increase points to a structural currency shortage in the informal market, where supply falls short of mounting demand. The reasons are multifaceted and interlinked.
Tourism Decline and Energy Crisis
The island's primary source of foreign currency, tourism, has plummeted. Between January and April 2026, only 328,608 visitors arrived, marking a 55.8% decrease compared to the same period in 2025. Hotel chains like Meliá and Iberostar have ceased operations in Cuba, and airlines from Canada and Russia have halted flights. Hotel occupancy rates have dropped below 10% according to some early-year reports.
Compounding the issue is an unprecedented energy crisis. President Miguel Díaz-Canel acknowledged that in the past five months, only a single oil shipment has been received, leading to blackouts lasting up to 20-24 hours daily in several provinces, crippling much of the production. The International Monetary Fund forecasts a 7.2% contraction in Cuba's GDP for 2026.
Economic Decline and Currency Demand
As the economy generates ever fewer foreign currencies, the internal demand for dollars and euros remains insatiable, driven by informal dollarization and mistrust in the CUP. Since January 2026, when the dollar was at 435 CUP, the American currency has surged by 220 CUP, reflecting a 50.6% increase in just over five months. With an average monthly salary of 6,930 CUP, a Cuban must work approximately 94 days to purchase 100 dollars at today's informal rate.
On Friday, Díaz-Canel announced a new set of economic reforms focusing on tourism and opening to diaspora capital. However, analysts criticized these measures as "too little, too late" to halt the decline.
Earlier in June, when the dollar had yet to surpass 630 CUP, an economic analysis warned it could reach 650 CUP by month's end. Reality exceeded those predictions in less than a week.
Understanding Cuba's Currency Crisis
Why are the exchange rates rising so rapidly in Cuba?
The rapid rise in exchange rates is attributed to a structural shortage of foreign currency in the informal market, exacerbated by a significant drop in tourism and an ongoing energy crisis.
How has the tourism decline affected Cuba's economy?
The decline in tourism, which is a major source of foreign currency for Cuba, has led to decreased economic activity and contributed to the scarcity of foreign currencies.
What are the potential impacts of Cuba's energy crisis?
The energy crisis has resulted in prolonged blackouts, disrupting production and further straining the economy, which is already facing a contraction.