Cuba announces intervention of the informal currency market in February

Cuba announces intervention of the informal currency market in February

HAVANA, January 30. Cuba announced that it was prepared to intervene in the informal currency market in February, although it did not give details of how it would do it.The Presidency of Cuba indicated that the government “will advance in the presentation of proposals to resize the exchange market, the intervention of the informal sector and the control of the exchange rate in the country.”

In this sense, they indicated that the actions to be developed include “the determination of the exchange rate and the formation of prices.”

The Minister of Economy and Planning, Alejandro Gil Fernández, said this Monday, at the meeting of the Council of Ministers, that they are “working hard on this because of the impact it has on the promotion and stimulation of production” in the country.

However, in the Cuban economy, more than an increase in productivity, exports and the development of goods and services, what will have an important weight is the old living strategy of emigrants.

This has been made clear by Gil Fernández when explaining how some of his measures are aimed at “recovering remittance flows, encouraging their capture and studying the feasibility of new channels, platforms and the use of digital scenarios for banked operations of collections and payments from the outside”.

In addition, the government plans starting in February to “implement the new mechanism for the allocation and management of liquidity for all economic actors.”

Gil assures that this will allow them to “achieve a more harmonious functioning of the economy and thus advance the autonomy of the state company.” The idea is reminiscent of their project for stores in MLC that would support the import of products to be sold in CUC or CUP stores, something that they never fulfilled.

While the government prepares to deploy its strategy and achieve intervention in the informal currency market, the dollar dawns this Monday for 285 pesos and the euro at 290 CUP.

In December, Prime Minister Manuel Marrero accused Cuban independent media of encouraging high prices and assured that in 2024 the official dollar rate will change.

None of the Cuban officials have dared, so far, to say how much the new price of the dollar will be set in Cuba.

Gil has insisted on several occasions that the government’s intervention in the informal currency market will be done because “it is a distortion” and they will not let it persist.

“The exchange market is one of the main distortions that the economy is facing and it is not by design. We did not design that exchange market that is operating in the country, but an important part of the foreign exchange that non-state acquirers do so in that market,” the official acknowledged.