He dollar American broke a record this Tuesday by reaching 500 Cuban pesos, just two months after premiere by the Government of a new floating exchange rate which aimed to “reduce the pressures and irregularities of the informal market.”
The currency reaches this barrier after several months of a government crackdown against the informal currency market and informal remittance mechanisms, in parallel with the authorities’ accusations against the opposition. The Touch and its exchange rate, which the authorities and official media accuse of manipulating the rate for political purposes.
Likewise, it occurs in the midst of an unprecedented energy crisis taken to the extreme after the establishment of an oil blockade by the United States, that forced the Government to ration fuel, reduce public services and prioritize activities essential in sectors such as health, water service and defense.
The currency was experiencing a sustained rise in the first weeks of this year, until reaching the barrier of 500 pesos, with projections of continuing its rise, according to the exchange rate. The Touch, whose access to its official website is blocked from the island.
For its part, the euro also increased its value, and is positioned today at 555 pesos, a value it rose to this day to confirm its increase in recent days, in which it has progressively distanced itself from the floating rate updated daily by the Central Bank of Cuba (BCC).
As for the MLC, it reached 410 CUP, with the possibility of increasing 10 pesos in the next few hours.
Last year the dollar also maintained an upward trend for much of the year, but – unlike the euro – it did not exceed the level of 500 pesos.
Since the end of October, the US currency, along with the European currency, experienced a drop in value, in a context marked by the devastating impact of Hurricane Melissa and campaigns against the interest rate. The Touch.
Almost at the end of last year, both currencies experienced fluctuations, but always below the values they had reached months before. This is how the BCC established the new floating rate, which was initially set only 30 pesos below the price at that time in the informal market.
The floating rate
The new rate It is published daily by the Central Bank and seeks to facilitate “exporters and other foreign currency suppliers to sell at a competitive price, determined by supply and demand,” as explained Juana Lilia Delgado, minister-president of the Central Bank of Cuba (BCC).
It aims, he said, “to encourage the entry of foreign currency into the exchange market, which will constitute a source for its operations and will reduce the pressures and irregularities of the informal market,” explained Delgado during a television intervention.
With this, far from unifying all existing rates into one, a third rate was created that for the moment must work on par with the others: the one that operates at 1 dollar for 24 pesos (1×24) and the one that operates at 1 for 120 (1×120).
In her speech, the minister-president of the BCC assured that the country does not have the conditions to implement a single rate, so the process that began in December will be “gradual and responsible.”
According to the official, “an immediate unification of the exchange rate, without a transition stage, could cause a sudden devaluation, with inflationary effects greater than the current ones and a deepening of the loss of purchasing power of the national currency against foreign currencies.”
This legal package, presented as a “temporary measure,” is in practice a new boost to the dollarization process on the island and, in the opinion of experts, prepared the ground for the establishment of the new exchange market, as in fact happened.
