Cuba approaches the ceiling of 200 pesos per dollar in the informal market

The exchange rate in the informal market in Cuba is about to break the historical ceiling of 200 Cuban pesos (cup) per dollar, and there are no expectations that the national currency will stop depreciating, according to economists consulted by Eph.

This exchange rate is the highest in the island’s recent past. Not even in the so-called Special Period of the 1990s –after the fall of the Soviet bloc– this price was exceeded.

The informal market, the majority on the island, is where many people stock up on dollars before leaving, as is the case with the current migratory wave. Since October 2021, more than 180,000 Cubans have arrived in the US, a record number.

“It’s a self-fulfilling prophecy,” says the Cuban Pavel Vidal Alexander, associate professor at the Javeriana University of Cali (Colombia), in an interview with the Spanish agency. “There is a total lack of credibility in the Cuban peso and there are no monetary policies to reverse the situation,” he adds.

The graph of the informal exchange market published every day by the independent specialized media The touchconverted into a reference in this market, leaves everything black on white.

Although the depreciation was already evident since 2021 – the year in which the greatest economic reform of recent years came into force, known as Ordering task– , the peso’s nosedive really originated this August.

Just a year ago, the dollar was at 65 pesos in the informal market. Ten months later, on August 1, at 115 pesos. Only two months, for this October 1, it depreciated almost 80 more, up to 198 pesos that marks this Saturday the index of The touch.


At the beginning of that month, the Minister of Economy, Alejandro Gil, announced that the State would buy foreign currency from individuals, a measure designed to capture foreign currency in a scenario of crisis in tourism.

The foreign exchange market and reform. There is no garden without flowers

Gil specified that the purchase would be based on an exchange five times higher than the official one –of 24 cup per dollar, established in the Ordering Task– at levels similar to those of the informal market at that time (around 120 cup).

Twenty days later, Gil made another announcement: the government would also sell foreign currency, although with limitations. The objective, he explained, was to strengthen the peso and gradually displace the sale of dollars on the street.

The experts consulted agree in describing the measure as erroneous, which showed the fragility of the State in the face of the informal market. Since then, the peso has fallen precipitously.

“The State became one more applicant (for foreign exchange) and a competitor” that could not win the game against bidders with better prices, he points out to Eph the economist Tamarys Lien Bahamonde.

Elías Amor, also a Cuban economist, shares the diagnosis and adds: “At the moment they set the new change, the agents (in the street market) increased the value to keep their clients and that is normal, it is called competition” .

Amor considers that one of the root problems was locating the change from 24 to 1 in the Ordering Task: “That rate came out like a rabbit out of a hat.”

“It was a miscalculation from the start. And the Central Bank of Cuba could not support with foreign currency an exchange rate as high as the one that had been established, ”he maintains.


The implementation of the limited official exchange market weighed down a currency that has been losing weight in the daily life of Cubans, who have also seen a stable refuge value in the dollar, experts say.

The long run of economics

But above all things, experts warn about an increasingly normalized phenomenon in the country: the social division between those who have foreign currency and those who do not.

Bahamonde recalled that not all the problems can be attributed to the foreign exchange market implemented by the Government.

The economist highlighted the role of the controversial stores that charge in foreign currency – known as MLC stores and which opened in 2019 –, which are occupying more space in the retail market every day.

“We have to let the Cuban peso be the country’s main currency. There is a dilemma: end or not the MLC (and stop entering foreign currency) to save the peso”, adds Bahamonde.


Another alarm signal is the amount of cup in circulation, because its increase favors inflation, another of the current problems of the Cuban economy.

The increase in prices officially stood at 13.40% in the first half, although independent analysts have placed it at figures above 100%.

Cuba: the dollar reaches 150 pesos in the informal market

The three experts agreed that the dollar will continue to rise in the short term. “Surely (the rate will reach) 300, especially between now and the end of the year,” Amor said.

Vidal, on the other hand, did not give an exact figure but made it clear that “200 will not be the limit.” Bahamonde was more cautious and limited herself to pointing out that she does not see “any possibility of containing the rise in the exchange rate.”


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