Title: Rapid Currency Value Increase in Cuba Sparks Concerns among Experts
In the past 24 hours, the euro and the dollar saw a significant increase in value against the Cuban peso, according to the representative rate of the informal market published by alternative media outlet, The Touch. The euro experienced a rise of five Cuban pesos, reaching a value of 245CUP, while the dollar increased by three Cuban pesos, now trading at 238CUP.
Furthermore, the freely convertible currency known as the MLC also exhibited an upward trend, with its value increasing by two Cuban pesos, currently standing at 208 CUP. The latest data reveals that, on average, the euro sells for 245CUP in the Cuban informal market, while the purchasing price hovers around 240CUP.
Contrary to physical currencies, the MLC holds no physical representation and cannot be used for purchases in Cuban stores with dollars. However, the government takes it into account to determine product prices in MLC.
Experts have observed a rapid rise in currency values circulating within the country in recent days, with the dollar and euro experiencing an overall increase of eight Cuban pesos within a week, as reported by The Touch.
Economist Rafaela Cruz from Cuba Daily commented on the situation, stating that the Cuban government’s inflationary policies, aiming to enhance company competitiveness, come at the expense of the workers’ well-being as their real wages become depressed. Cruz also stressed that these policies, alongside other measures implemented by the regime, have impacted currency prices on the island.
Despite the shortage of cash in previous months, which has acted as a pseudo-capital control, and potentially slowed down the circulation of the Cuban peso, Cruz noted that in the long run, this scenario further drives people to gravitate towards the dollar as a more reliable medium of exchange and store of value.
Additionally, the columnist from Cuba Daily warned that Micro, Small, and Medium-sized Enterprises (MSMEs) do not contribute to reducing currency volatility. On the contrary, due to a liquidity crisis, the value of the national currency cannot be supported with dollars. The columnist pointed out that while MSMEs have exported 6.3 million dollars, they have imported a staggering 246 million dollars, indicating a great divide. This highlights the MSMEs’ tendency to buy cheap abroad and sell at higher prices domestically, ultimately benefiting Miami, while the Cuban economy suffers.
The increasing value of currencies circulating in Cuba has raised concerns among experts who fear the impact this may have on the country’s economy. As the situation unfolds, it remains to be seen how the Cuban government will respond to address these challenges.