EFE (via 14ymedio) Havana,15 January 2024 — The US dollar set a new record in Cuba on Monday by trading at 275 pesos on the informal foreign exchange market, which deepens the strong depreciation of the local currency since the economic reform of 2021.
This new maximum – recorded by the independent media El Toque – comes after the announcement, in mid-December, of a large macroeconomic adjustment program by the Cuban Government.
Among the measures announced, such as the 500% increase in the price of gasoline and diesel, is the implementation of a new official exchange rate
Among the measures announced, such as the increase of 500% in the price of gasoline and diesel, is the implementation of a new official exchange rate, which since 2021 stands at 24 pesos per dollar (1.045% lower than the informal rate) for companies and 120 for individuals (129% lower than on the black market).
A few days after Prime Minister Manuel Marrero announced the plan in Parliament, the informal rate registered a slight drop to reach 265 pesos per dollar. But in 2024 it has risen again to the levels prior to the announcement, until it broke the record this Monday.
The need to import 80% of what the country consumes, the strong migratory pressure and the uncertainty due to the serious crisis are some of the main factors that explain the current partial dollarization of the Cuban economy and the consequent depreciation of the Cuban peso.
The Government has recognized on several occasions the failures in the design and implementation of the 2021 reform, called the OrderingTask,* which has not met the objectives of ending the monetary duality of the Island, which used the national currency and the convertible peso (CUC), equivalent to the dollar.
In state exchange offices only up to 100 units of the US currency are sold per person per day
Many people stock up on dollars in the informal market due to restrictions on buying them at state exchange offices, where only up to 100 units of the US currency are sold per person per day, and only if there is availability.
The El Toque index – harshly criticized by the Government for stirring up “speculation” – takes as a reference about 2,000 daily ads for the sale of foreign exchange on several Cuban websites to establish its reference exchange rate, according to this independent media.
In the absence of another type of official indicator, this index has become the benchmark on the street and for economists who study the situation in the country.
*Translator’s note: The Ordering Task is a collection of measures that include eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso (CUP) as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency, which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy.
Translated by Regina Anavy
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