HAVANA, Cuba.- The Cuban rulers, when it came to officially establishing the exchange market for the purchase and sale of foreign currency, had no choice but to forget the exchange rate of 1 dollar = 24 Cuban pesos, which had been set at the start of the Sort Task. Obviously, it was an already obsolete exchange rate, which did not respond to the existing relationship between the two currencies. Under these conditions, the people who obtained foreign currency were not encouraged to exchange it for the national currency.
That is how the authorities decided to set a new exchange rate that would have as a reference what they describe as the “informal market”, something similar to the black market in relation to the commercialization of goods and services. It was an exchange rate that exceeded one hundred Cuban pesos for every dollar.
Given the concern of some citizens, who questioned the aforementioned reference to the informal market, the newspaper Granmain its edition of August 27, published the work “Why was the informal market exchange rate used as a reference??”
After asserting that informal exchange is permeated by speculative processes that could deviate from the equilibrium exchange rate under normal operating conditions, Granma recognizes that “the informal exchange rate is the closest reference to the conditions under which the agents that attend the informal market feel motivated to exchange foreign currency (currency) for national currency and vice versa.”
The Cuban rulers were admitting, even without calling it by name due to the disdain with which they have always viewed the laws of the market, that this informal market, which is none other than that invisible hand that the Scottish economist spoke of more than two hundred years ago Adam Smith, is the most convenient way to go.
And now, after the first days of operation of the foreign exchange market in its two aspects, buying and selling, a new panorama is presented to everyone’s view.
The government’s supply of freely convertible currency (MLC) to sell to the population, especially dollars and euros, is well below the high demand for this type of currency. The population must stand in long queues to access the sales outlets (CADECA), and the maximum amount to be sold -100 dollars or its equivalent- is not enough to satisfy the needs of many of the buyers. Under these conditions, it is already possible to glimpse that the gap in the supply-demand relationship will give rise to a new informal market.
In this context, another article also appeared in the newspaper Granma points to “what will happen if we allow those resellers to take over the space of the CADECAs, monopolize the queues, and therefore carry into their pockets what with a not inconsiderable effort is made available to the people again today?”
Those “resellers” referred to Granma they would be the people who would be in a position to offer all the MLCs that the buyers wanted, perhaps without any limit, and probably without the need for citizens to get involved in a queue for several days to access dollars or euros. Of course, all this would be at an exchange rate higher than that established by the authorities.
But this new higher exchange rate, if it had the acceptance of buyers by making the purchase process less exhausting, and managed to balance the relationship between supply and demand, rather than a presence of the informal market, it would truly be the true manifestation of the laws of the market.
OPINION ARTICLE
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