A significant shift in the Cuban informal currency market has taken place, as the euro has surged to 400 Cuban pesos (CUP), marking a symbolic barrier that hasn't been seen since May 2024. The US dollar also continues its upward trajectory, now trading at 375 CUP, while the Freely Convertible Currency (MLC) remains stable at 260 CUP. According to independent outlet elTOQUE's daily tracking, this movement reflects a steady upward trend over recent days.
Financial instability is having profound effects on the Cuban domestic economy. This new milestone for the euro highlights an ongoing issue of declining purchasing power for the Cuban peso, particularly within a context where state wages are tied to a weakening national currency. The immediate repercussions are evident in essential sectors such as food, medication, transportation, and access to basic services, many of which are dollarized or linked to payments in MLC. Memories of similar economic conditions in May 2024 resurface, when the European currency briefly surpassed 400 CUP due to scarcity in official channels and rising inflation.
The future outlook for Cuba’s economy hinges on restoring confidence in the national currency. Without measures to bolster trust, there is concern that the partial dollarization of the economy could evolve into total dollarization. Such a scenario would require comprehensive reforms establishing an official exchange rate alongside appropriate wages and pensions. Meanwhile, Cubans continue grappling with one of the crisis's most challenging aspects: a national currency losing value daily, while foreign currencies become increasingly unattainable. Strengthening local financial systems and implementing transparent policies could pave the way for economic recovery and stability.