The volatility of the market is reflected, where the value of the Cuban peso depends on the relationship between supply and demand in private transactions.
LIMA, Peru – After more than a week of decline, the dollar and the euro are rising again in the informal currency market in Cuba, according to the report published this November 9 by the independent media the TOUCH.
The dollar woke up this Saturday at 420 CUP, about 10 pesos more than the day before, while the euro follows a similar behavior: it now stands at 455 CUP, five pesos more than the previous day.
According to the media, the recent drop in these currencies on the Island responds to a phenomenon known as exchange rate overreaction or overshootingin which a sharp rise driven by speculative expectations is followed by a partial correction. This pattern, they noted, has been repeated several times since 2022.
Despite the latest drop, the distance between the Cuban peso and currencies remains abysmal. With an average state salary of 5,000 CUP, a worker can barely buy around 12 dollars in the informal market, evidence of the persistent deterioration of purchasing power.
Besides, the fall or rise of currencies It is not reflected in the cost of living. Prices of food, transportation and services continue to rise, driven by shortages and costs in foreign currency. Consequently, the decline of the dollar does not represent tangible relief for the economy of Cuban households for now.
The movement reflects the volatility of the informal market, where the value of the Cuban peso depends on the relationship between supply and demand in private transactions and not on effective monetary policy. The shortage of foreign currency, inflation and loss of confidence in the financial system continue to be the main factors influencing the behavior of the exchange rate.
