Currency Turmoil in Cuba: Informal Market Sees Exchange Rate Fluctuations

The informal currency market in Cuba experienced a surprising shift on Tuesday, breaking the trend seen in recent weeks. The Freely Convertible Currency (MLC) dropped by 10 pesos, settling at 500 Cuban pesos (CUP) after a dramatic increase of 70 pesos just a day earlier.

This marks the first sign of a possible slowdown, amidst what seems to be a temporary stabilization of both the dollar and the euro at their peak values.

The Dollar and Euro: Stability After Continuous Increases

For the first time in 20 days, the dollar remained unchanged at 670 CUP. This static position followed a record-setting jump of 10 pesos on Monday, hitting an all-time high.

The euro, too, stayed at 770 CUP, maintaining a 100-peso lead over the dollar, a level reached in the previous trading session.

This pause is noteworthy since the dollar began June at 585 CUP and incrementally rose, crossing 600 pesos on June 3, reaching 625 by June 8, passing 650 on June 12, and attaining 670 on June 15. Over just 15 days, it increased by 85 CUP, a rise of more than 14%.

MLC's Sharp Decline After a Historic Peak

The standout change on Tuesday was the correction in the MLC rate. After a sudden increase of 70 pesos on Monday, pushing past 500 CUP to 510, it fell back to 500 CUP the next day.

The MLC, a digital tool created by the Cuban regime for purchases in state-run stores, mirrors the lack of trust in the state financial system and a shortage of physical currency. In the first ten days of June, it climbed from 405 CUP to 510 CUP before this correction.

Projections Surpassed Ahead of Schedule

The Observatory of Currencies and Finance (OMFi) at elTOQUE had predicted a maximum of 650 CUP per dollar by the end of June. This was exceeded on June 12, almost three weeks early.

According to elTOQUE Markets, the market median stands at 670 CUP, with most offers between 670 and 675 pesos. However, values stretch up to near 710 CUP. The platform forewarned that "everything indicates that the dollar and other currencies will continue to rise against the Cuban peso in the short term."

This is due to structural issues: "For the CUP to recover, many more people would have to be selling dollars than buying them. This is not happening," clarified elTOQUE.

Underlying Causes of the Currency Spiral

Several interrelated factors contribute to this situation. Tourism has plummeted, with Cuba receiving just 328,608 visitors from January to April 2026, a significant 55.8% decrease compared to the same period in 2025. May saw only 30,883 tourists, marking the lowest monthly figure in years.

Additionally, an acute energy crisis has resulted in generation deficits of over 1,780 MW as recorded on June 13. Coupled with this is an unbacked monetary expansion: the regime issued 2,000 and 5,000 peso notes that started circulating on April 1, implicitly acknowledging the inflationary impact. Cubans responded with sarcasm: "My salary in one bill."

Since 2020, the Cuban peso has lost over 95% of its value against the dollar in the informal market, falling from approximately 42 CUP per dollar to the current 670 CUP. The official rate from the Central Bank today stands at 551 CUP, creating a 119 pesos gap with the real market rate.

Cuban economist Elías Amor has issued a stark warning that captures the economic climate: "Those exchanging currencies say no, not at 600, at 700, and the next week at 800, and so on, because in the coming months, currencies are not going to enter Cuba." If macroeconomic imbalances are not addressed, he warns, the dollar could approach 1,000 pesos.