14ymedio, Elías Amor Bravo, Economist, 29 August 2023 — It was just what was missing. Faced with the bewilderment caused by a fall in the value of the Cuban peso with respect to all currencies, which pushes the economy into an abyss, the regime takes out of the hat in the state press a theory that explains that the current exchange rate for the peso is dictated by the United States, as a result of what they call “a cooked-up strategy” to strangle the economy of the Cuban family. And they blame the online site el Toque* for this situation. Reading these things in a mandatory way is one thing; believing them and giving them a hand is quite another.
The communists’ obsession with the neighbor of the North, whom they blame for all present, past and future evils, is known. Now making fools of themselves in an unprecedented way, they also blame the “new manipulation tool,” specifically el Toque, for decreasing the value of the Cuban peso. The reality could not be more absurd, but they even justify it by saying that this action takes place “because of the short-term limited availability of Cuban pesos in the country’s banks.” As for assuming their own responsibility, nothing.
Cuban communists can rest assured, there is no war of the enemy in this matter of the peso’s weakness. It’s the result of a series of economic policy errors that, when committed, are widely sanctioned by market forces, even in Stalinist-based economies like the Cuban one.
What mistakes are we talking about that have led us to this situation?
First of all, the Ordering Task.** That jumble of measures was going to be the salvation of the economy, favoring the monetary unification of the CUP [Cuban peso] with the CUC [Cuban convertible peso]. Nobody remembers, but the commitment to a fixed exchange rate system, without a prior analysis of the fundamentals, for the peso, with an exchange of 1 CUC for 24 CUP was a serious mistake, because the Central Bank did not have enough reserves to support the national money.
The exchange barely lasted a month. The government closed operations in the Cadecas [currency exchanges], the banks and even in the airport offices. To meet the demand for dollars, offers appeared timidly for exchange in some informal markets that worked in real time, not only with dollars, but with the rest of the hard currencies. Informal markets did not obey, at least at their birth and then with definitive consolidation, a strategy “cooked-up in the United States to strangle the economy of the Cuban family.”
Not at all. They arose precisely for the opposite reason, to meet the population’s need for currency exchange at a time when the communist state was unable to assume this function. The informal market is not about any “new manipulation tool.” Its appearance, consolidation and development was obeyed because of the regime’s political incompetence and the short-term limitations of the availability of cash in the national money in the country’s banks. It was not possible, as was proven from the outset, to bet on a fixed exchange rate system for the newly integrated peso.
Then the informal market traded the peso downwards because it showed an evident weakness in relation to the different currencies as a result of the accelerated deterioration of the economy and the growing demand for hard currency for numerous activities that were developing in the foreign sector. So, in the summer, Minister Gil made a new move and opened an intermediate exchange, with a price of $1 to 120 CUP, also rationed and highly controlled, with physical limits on transactions that were immediately seen by Cubans as unattractive.
As a result, the peso continued to plummet, reaching its lowest price in history. And of course in the face of this scenario of errors, faults and manipulations, the regime uses its spokespersons to affirm that exchanging in the informal market “spreads like a dangerous virus among the people, many of whom succumb to the unpunished and opportunistic offers found on social networks.” Readers of this blog can only imagine what the communists mean by “unpunished and opportunistic offers.”
Well, nothing, something as simple as “If you transfer 30,000 pesos, you can receive 25,000 in cash.” Someone should explain to the communist leaders that if these operations are offered and they have willing customers, it’s because there’s an uncovered need that must be met and for which they have to pay. The communists, unable to understand the rules of accumulation, consider that this “business” creates the kind of unscrupulous speculators who rub their palms together and boast about “making money off the needs of the people.”
And if such a statement is unreal and ridiculous because it does not correspond to objective facts, it’s a leap into the void to blame the citizens who carry out these operations “knowing that they play the game of the economic war financed by our ’concerned’ neighbor of the North.”
Not content with making fools of themselves by denying reality, the communist press, paid for by money from Cubans, charges against the initiative of el Toque, which has been offering daily and high quality information about the exchange rates for the Cuban peso in the informal market. This public service should be offered by the Central Bank of Cuba, which absurdly maintains absolute ignorance of these exchange rates.
Then they talk about evidence of manipulation, when the question is, Who manipulates whom? In reality, el Toque has achieved a remarkable appeal for analysts and the general public, who know that in order to have truthful and accurate information on the price of the peso, the boring articles in Cubadebate are useless. El Toque is the source of information even for the international press, without any need to capitalize on anything, manipulate or defend the interests of the United States in an unreal war that the communists so long for.
For them, el Toque carries out an opportunistic manipulation of the exchange values of the MLC, the dollar and the euro, against the real purchasing power of the family, by offering the real data daily. The heavy artillery against el Toque is alarming and causes fear when they say that “this page of falsehoods, speaking for everything that serves the counterrevolution, is the result of the media articulation ’perfected’ by order of the former president of the United States, Donald Trump, in February 2017, to act in Cuban cyberspace, through the creation of a Special Task Force.”
In discrediting the good work done by el Toque and the service it offers to Cubans, it’s necessary to understand who is the manipulator and opportunist in the matter. Throwing accusations against el Toque, which they falsely compare with another project of Venezuela, The Dollar Today, which has nothing to do with the Cuban initiative, only shows how ridiculous the official communist line is. They’re unable to understand what a successful civil society initiative means, and why el Toque has been gaining followers in increasing number and quality.
As if that were not enough, the regime attributes the weakness of the Cuban peso to “this war of the enemy that does not act head-on, but through its think tanks, pressure groups and financial lobbies, with the support of a well-articulated, well-paid media network affiliated with large media conglomerates and special services, to generate processes of economic destabilization operating from the shadows.”
I can assure you that this blog receives no payments, no rewards, no fees or any emolument. And its objective is not to destabilize anything, operating from the shadows, but to describe in the light of day the aberrations that the communists commit in terms of economic policy and the disaster to which they have led the nation, while we express our concern about what may happen to el Toque.
* El Toque is an independent digital newspaper that provides daily exchange rates for the Cuban peso in all markets, including that of cryptocurrency.
** 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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