14ymedio, Havana, 16 September 2022 — “You don’t need to be a guru in the sector to infer that the trigger of emigration via Nicaragua will lead to the dollar reaching 200 pesos in a few weeks.” The quote doesn’t come from any independent page dedicated to tracking the foreign exchange market or from any economic analyst, but from an article in the official Cuban press.
Published this Friday in the newspaper 5 de Septiembre in Cienfuegos, the text doubts the “exchange rate strategy” of the government, which on August 23 established the purchase of cash through exchange houses (Cadecas), and believes that the measure, for now, is performing “below expectations.”
Its author, Julio Martínez Molina, recalls that in a previous column, he pondered the government’s decision, calling it “backed by the citizens,” and warning, at the same time, that its success depended “on the Cadecas’ levels of operations and the daily existence of freely convertible currency in these establishments,” because otherwise, “we wouldn’t be in them.”
After this presentation, he lashes out: “Although it may be too early to evaluate, everything happened as planned, even for those of us who know little about the economy: in the face of the emergence of an exchange rate strategy born seven months ago (because there isn’t enough currency to sell, in total quantity and, throughout the day, in the designated units), the urgent counter response of the informal market would be the elevation, even more, of the burdens on the hard currency.”
Thus, the article continues, as of Friday, those currencies, which in official establishments have not risen from 123 pesos, are around 165 pesos in the informal market, where they are expected to continue to rise in the coming weeks to 200 pesos. The conclusion is that “the benefit of the measure, up to now, has been quite limited.”
To solve the situation, the author hopes “vehemently” that there will be “some institutional tricks pulled out of the bag,” because “if the schism does occur between the state option, the most favorable by far to the buyer although very small, and the informal one, there will be unimagined distances between them.”
On the same day and the days following the implementation of the measure, this newspaper noted in several places the results predicted by the official writer: the dollars were running out quickly, and the hard currencies began to rise like foam on the black market. But there was another reality, which the Cienfuegos newspaper didn’t mention: the long lines to acquire dollars in the Cadeca, strongly guarded, which have come to join the so many other lines for chicken, bread or a hygiene product.
Translated by Regina Anavy
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