On the streets of the Island, the conviction grows that there will be no breaks on the rise of the US currency
14ymedio, Yoani Sánchez, Generation Y, Havana, 11 June 2024 — Like in those movies where the main character is injured, rolls in the mud and then gets up to say “it was nothing, just a scratch,” the dollar has begun to recover in the Cuban informal market after a fall that has lasted just a couple of weeks. On the streets of the Island, the conviction is growing that the stumble has only been to gain momentum and that there will be no breaks on the rise of the US currency.
At the beginning of the month of May, the dollar, or the fula as it is popularly referred to, reached close to 400 Cuban pesos in the clandestine currency purchase and sale networks. That figure, in addition to being unprecedented, revealed the weakness of salaries on the Island, where a health professional, with a specialty under their belt, barely earns the equivalent of less than 50 dollars per month. Nor did a drop in the value of what is also called, ironically, “the enemy’s currency,” mean a moderation in the prices of basic products.
Those who receive dollars from abroad held their breath and their wallets to avoid selling their currencies on the days when ‘the green’ experienced a fall
Those who receive dollars from abroad held their breath and their wallets to avoid selling their currencies on the days when ‘the green’ experienced a fall. But those who live only on a salary in national currency could not enjoy the fact that the bill with the face of George Washington could be exchanged for less than 350 pesos. No private business, of those that have begun to spread across the Island and which mainly offer imported foods, lowered the prices of their merchandise. No collective taxi driver, fruit and vegetable merchant, or produce hauler took a centavo off their fares.
Why this paralysis in the face of the decline in the value of the dollar? The reason points to the skepticism surrounding the weak Cuban peso and the popular conviction that, in addition to the oscillations and any setbacks that the US currency suffers, it is money backed by elements that those banknotes with the images of José Martí, Antonio Maceo y Calixto García are almost completely missing. The dollar enjoys everything that national money lacks: trust among those who use it, productive support and international financial entities that support it.
Another reason for not getting carried away by the setback suffered by ‘the green’ was the suspicion that its slippage was being influenced by false advertisements for the sale of foreign currency, at a lower price, coming from the Cuban regime’s bot factory. On the streets of the Island, many considered that officialdom had used force to adulterate the result of the algorithm that, on the independent site El Toque, calculates the value of foreign currencies on the Cuban black market. That intuition was accompanied by the conviction that maintaining that pulse was almost impossible for the Plaza de la Revolución and that it would end up losing it, as has happened.
This week, the dollar has once again touched 400 Cuban pesos and the short- and medium-term forecast is that its comeback will continue without major obstacles along the way.
This week, the dollar has once again touched 400 Cuban pesos and the short- and medium-term forecast is that its comeback will continue without major obstacles along the way. One does not have to be an expert in finance or a university graduate in Economics to conclude that the national currency is mortally wounded.
The low productivity of industry, the agricultural sector and other networks that generate goods and services have dug the grave of the peso. The restrictions on withdrawing cash from banks, partly motivated by the economic crisis but also by an official desire to collect money in circulation to force the decline of currencies, has increased suspicion about the currency in which Cuban salaries are paid. Informal dollarization has spread and entrepreneurs prefer to understand each other in the language of currencies. The few Cubans who maintain savings have understood that it is better to keep greenbacks under the mattress.
The mass exodus that the Island has been experiencing for several years has also ended up crowning the “dollar emperor.” The demand in the informal market for this currency is motivated, to a large extent, by the need to pay for tickets to emigrate and to finance the costs of transportation through Central America to the southern border of the United States. The bills with the face of Camilo Cienfuegos or Ernesto Che Guevara have no place in the pockets of these migrants; the paper money they carry has the penetrating gaze and stately bearing of Abraham Lincoln printed on it.
Editor’s Note: This text was originally published in Deutsche Welle in Spanish
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