As of 8:00 PM local time in Cuba, the informal currency market wrapped up trading on Tuesday, October 13, with significant upward movements.
The US dollar reached a new high of 793 Cuban pesos, the euro rose to 888 pesos, and the MLC hovered around 550 pesos. However, the MLC rate should be viewed cautiously due to the limited volume of transactions.
The American dollar closed at 793 Cuban pesos (CUP) for the day, marking a 5-peso increase from the previous day's close of 788 CUP. Over the past week, the dollar has climbed 22.5 pesos, rising from 770 CUP a week ago, which represents a 2.9% increase.
Compared to 30 days ago, the dollar has surged by 99 pesos from 694 CUP. It's important to consider that this comparison may partially reflect methodological adjustments to the index. This session marks the dollar's highest point in the last 30 days, continuing to set the pace in the informal market amid persistent currency shortages.
Euro's Strength in the Cuban Market
The euro is currently valued at 888 Cuban pesos (CUP), reflecting a 2.5-peso increase from its previous close of 885 CUP. Over the past week, the European currency has gained 22.5 pesos against its 865 CUP valuation a week ago, showing a 2.6% rise.
Like the dollar, the euro has hit its highest level in the last 30 days, at 888 CUP, compared to a low of 792 CUP within the same period. It surpasses the dollar by 95 pesos, solidifying its position as the most expensive currency in Cuba's parallel market.
MLC Value and Its Limitations
The MLC settled around 550 Cuban pesos (CUP), a figure that should be interpreted with caution due to the limited volume of trades recorded at this time. Compared to the previous session, which reported a value of 513 CUP, it shows a rise of 37.5 pesos.
However, over the past week, the MLC has decreased by 53 pesos from 603 CUP, an 8.8% drop. Without physical existence, its use is restricted to state-run stores that accept it, limiting its circulation compared to cash currencies.
Official vs. Informal Exchange Rates
The official exchange rate from the Central Bank of Cuba (Segment III) remains at 702 CUP per dollar and 783 CUP per euro, significantly lower than the rates prevailing in the informal currency market.
Although Segment III was introduced as a more flexible exchange mechanism, its official rate continues to fall short of meeting the real demand for foreign currency among the population. The gap between the official and informal rates now exceeds 91 pesos for the dollar and 105 pesos for the euro.
This disparity underscores the ongoing shortage of foreign currency within the state banking system and the high demand for dollars and euros among Cubans, whether for emigration, importing goods, safeguarding savings, or making purchases in the private sector.
In a context of sustained inflation, low state salaries, and increasing partial dollarization of the economy, every fluctuation in the informal market has a direct impact on domestic prices and the purchasing power of Cuban citizens.
The CiberCuba Exchange Rate is an index of the Cuban informal market, compiled from the automated analysis of thousands of currency exchange postings in Telegram and Facebook groups. The calculation excludes atypical offers and spam messages, weighs each transaction according to its recency, and consolidates a representative value updated multiple times a day.
Understanding Cuba's Currency Exchange Dynamics
How much has the US dollar increased in the past 30 days?
The US dollar has increased by 99 pesos over the past 30 days, from 694 CUP to 793 CUP.
What is the current gap between the official and informal exchange rates for the euro?
The gap between the official and informal exchange rates for the euro is currently 105 pesos, with the informal rate at 888 CUP and the official rate at 783 CUP.
What factors contribute to the high demand for foreign currency in Cuba?
The high demand for foreign currency in Cuba is driven by the need to emigrate, import goods, protect savings, and make private sector purchases, amid an ongoing currency shortage.