Another day of decline in dollars and euros in Cuba

Another day of decline in dollars and euros in Cuba

HAVANA, June 2  The fall in the price of currencies in the informal market does not stop in Cuba, and this Sunday the quotes of dollars and euros mark a new decline.The US currency has had 18 consecutive days of accelerated and abrupt decline in its price, during which time it has accumulated more than 100 pesos of decline, confirming an unprecedented pace of decline since elTOQUE began documenting the price oscillations in the informal sale of currency on the island.

If the day before the dollar fell 5 points and was trading at 290 Cuban pesos (CUP), this Sunday the greenback sank 8 points compared to the previous day and was trading at 282 Cuban pesos.

A jump of five points was recorded again in the case of the European currency. This Sunday, the euro, which was trading at 300 CUP yesterday, dawns at a price of 295 CUP. Indifferent to what is happening around it, the freely convertible currency (MLC) maintains the previous day’s price of 260 pesos.

Exchange rate today 06/02/2024 – 6:22am in Cuba:

Exchange rate from USD to CUP according to elTOQUE: 282 CUP
Euro exchange rate EUR to CUP according to elTOQUE: 295 CUP
Exchange rate from MLC to CUP according to elTOQUE: 260 CUP

Alternative exchange rate from other platforms:

Dollar (USD) exchange rate: Buy 278 CUP, Sell 288 CUP
Euro (EUR) exchange rate: Buy 288 CUP, Sell 296 CUP
MLC exchange rate: Buy 250 CUP, Sell 258 CUP

The informal Cuba exchange rate offered here is not officially recognized or endorsed by any financial or government entity.

Read also: The euro and the dollar fall at record speed in Cuba in the last hours

Without parachutes: Currencies experience a dizzying decline in Cuba

Recently, the independent media elTOQUE, which since 2019 has documented the ups and downs of the price of reference currencies in Cuba in the informal market, gave its opinion about the sharp decline in the value of dollars, euros and MLC.

“The announcement of the reestablishment of remittance services to the island through Western Union (on May 9) and the proximity to a fixed value (400 CUP x 1 USD) could have influenced expectations, the so-called ‘market sentiment ‘”, first noted the economist Pavel Vidal Alejandro in an extensive article on the subject.

The economist specified that a “new balance has been formed in the consensus and attitude of market participants.”

That is to say, “a growing number of people began to consider that the price of currencies was excessively high and chose to sell before a possible fall,” which triggered the supply.

Vidal Alejandro assured that since mid-May – coinciding with the beginning of the fall of the three reference currencies – there has been a notable increase in the supply of currencies in the sample monitored in virtual spaces.

On the other hand, the aforementioned media pointed out that it is natural that “temporary corrections occur after an extended bullish period in the market.”

He explained that since 2022 there have been six sharp and consecutive drops in currency values, which have lasted in some cases up to weeks but then recovered again.

Is the Cuban peso really appreciating these days?

Vidal Alejandro considered that the fundamental factors that explain the internal and external imbalances of the Cuban economy have not changed and that therefore “the current inflection of the rate should not be associated with a modification of the trend.”

“During the last four years, the value of the Cuban peso has presented a permanent tendency towards depreciation that is consistent with the high fiscal deficit, the excessive issuance of Cuban pesos, the contraction of national production and exports, the growing dependence on products and imported inputs, dollarization, emigration and widespread and persistent inflation in the markets”, that is, the crisis continues and there is no reason for the peso to change its tendency towards devaluation.

And there is more, the growth of tourism has slowed down, exports of goods were below expectations and the sugar harvest continues to fail to stabilize production. As if it were not enough, at the end of February of this year, the imbalance in the State budget accumulated more than 20,000 million pesos.

For his part, Cuban economist Emilio Morales assured this week that it is “impossible” for the Cuban peso to have revalued on its own, gaining ground on the dollar, as has happened in recent days, and he blamed the fall in the informal price of currency at the maneuvers of the cyber-clears of the UCI (University of Computer Sciences) of the island.

In Morales’ opinion, the only news that can revalue the peso on its own is “that the Government fell,” and this is because it would finally open up hope for a change in the system.