Value of the dollar in Cuba this March 7 from USD to CUP

Valor del dólar en Cuba este 7 de marzo de USD a CUP

HAVANA, March 7. After the opening, the US dollar is trading today at 24 Cuban pesos at the official exchange rate, so it represented a variation of 0.09% compared to 23.98 pesos in the previous session. About the variations of this today compared to previous days, it reverses the data from the previous day, when it ended with a decrease of 0.37%, without being able to establish a recently defined trend.

The volatility of the last seven days is 3.8%, which is a figure lower than the annual volatility figure (4.34%), presenting itself as a value with fewer changes than normal in recent dates.

A year of low expectations

At the end of 2023, Cuba announced a series of measures that will be in force in 2024. Among the most important are the increase in the prices of fuel and basic services, cuts in subsidies and restrictions for the private sector.

One of the measures that most affects the population is the 25% increase in prices in homes that consume more electricity.

The island’s communist government forecasts that the economy will grow 2 percent this year.

The Cuban peso

The Cuban peso is the legal currency in Cuba and is used by the majority of the population. It is divided into 100 units called centavos.

As of January 1, 2021, the convertible Cuban peso ceased to exist as legal tender, as it was the most accepted in the payment of obligations and although it still has legal value, it is not received in the payment of products and services.

In 2002 the exchange rate was 21 Cuban pesos for each convertible peso, but later it was devalued until it reached 26 Cuban pesos per convertible peso. As for the dollar, it is equivalent to 25 Cuban pesos and one convertible Cuban peso.

It was not until April 2005 that the government agreed to devalue the Cuban peso concerning the convertible peso by passing it to 25 Cuban pesos per convertible peso and the latter remained at parity of 1:1 concerning the dollar plus a 10 percent tax. This means that for every dollar exchanged, 12% of its value is lost.

This was the case until January 1, 2021, when “Day Zero” of monetary unification was agreed upon, although for many the extinction of the convertible peso was seen as a devaluation, for others it was just a measure to catch up with the 24 Cuban pesos for every dollar.

Consequently, the demand for foreign currency also pushed the black exchange market in which one dollar was sold for every 100 convertible Cuban pesos.

Read also: THE DOLLAR BREAKS A NEW RECORD IN THE CUBAN INFORMAL MARKET

Currently, there are coins of 1, 2, 5 and 20 centavos and 1, 3 and 5 pesos; while in bills there are 1, 3, 5, 10, 20, 50, 100, 200, 500 and 1000 pesos.

Economically, the Minister of Economy himself, Alejandro Gil Fernández, acknowledged that the projected levels were not reached in 2022 due to the impossibility of achieving the expected income from exports.

Likewise, there was a decrease in tourism; as well as an increase in inflation of up to 40%, which had repercussions in an increase in the prices of the basket of goods and services. As the minister clarified, inflation is an effect of the lack of availability of foreign currency.

On the other hand, according to the latest forecasts made by the Economic Commission for Latin America and the Caribbean (ECLAC), after there was progress in 2022 following the crisis due to the coronavirus pandemic, a decline was expected in 2023. or an exhaustion of the rebound effect in recovery.

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