The new brand is produced against a backdrop of foreign currency shortages, limited domestic production and high demand for foreign currency.
LIMA, Peru – This October 12, the US dollar reached another record figure of 458 Cuban pesos in the informal market, three more than the day before, according to the records of the Representative Rate of the Informal Market (TRMI) prepared by the independent media The Touch.
It is the first time that the North American currency has reached that value since this indicator was officially measured, which collects and processes quotes published on social networks and trading platforms.
This new milestone occurs in a context of shortage of foreign currency, limited national production and high demand for foreign currency for consumption, savings and non-state imports. Along with the rise of the dollar, other currencies also register high values: the euro is around 520 pesos, five more than last Saturday.
The current crisis, furthermore, is marked by a persistent inflation —14.37% year-on-year in July, according to the National Office of Statistics and Information (ONEI)— and the absence of exchange reforms that stabilize the value of the peso.
Economist Pedro Monreal has warned in recent months about the presence of stagflation in Cuba, that is, the combination of economic stagnation and inflation, and stressed that the recent increase in food prices reverses the moderation that had been observed at the beginning of the year.
The publication of The Touch It also included rates of other currencies such as the pound sterling (476.85 CUP), the Canadian dollar (301.06 CUP) and the Mexican peso (23.10 CUP), as well as a reference to the cryptocurrency market, which has gained space among those looking for alternatives to circumvent state restrictions.
This new increase in the dollar adds to a sustained trend of devaluation of the Cuban peso, which in July was trading around 370 CUP per dollar. In just three months, the national currency has lost more than 80 pesos against the US currency.
The escalation occurs while the authorities have announced, without concrete details, the intention to establish a floating exchange system to reduce the gap between official rates and those of the informal market. So far, however, no public steps have been taken toward implementing that measure.
In practice, the difference between the state contribution and that of the informal market deepens the economic inequality: Those who receive remittances in foreign currencies have much greater purchasing power than those who receive remittances in national currency. Meanwhile, the prices of basic goods and services remain tied to the value of currencies, aggravating the pressure on the population.
