In a new chapter of a seemingly endless story, this Friday two of the three benchmark currencies in the Cuban informal market woke up to price increases.
The euro rises from 400 to 402.5 CUP, with an increase of 2.5 pesos, according to elToque's daily rate documenting the price fluctuations of currencies in the informal market.
On the other hand, the average sale of Freely Convertible Currency (MLC) suddenly increased by five pesos, rising to 305 CUP today after staying at 300 pesos for six days.
The dollar remains stable this May 10, continuing at 395 CUP per unit, a value it reached in the previous session.
Exchange rate today 10/05/2024 - 7:35 a.m. in Cuba:
USD to CUP exchange rate according to elTOQUE: 395 CUP.
Exchange rate of the euro EUR to CUP according to elTOQUE: 402.5 CUP.
Exchange rate of MLC to CUP according to elTOQUE: 305 CUP.
Alternative exchange rate from other platforms:
Exchange rate of the dollar (USD): Buy 391 CUP, Sell 393 CUP.
Exchange rate of the Euro (EUR): Buy 400 CUP, Sell 400 CUP.
Exchange rate for MLC: Purchase 301 CUP, Sale 301 CUP.
The informal exchange rate of Cuba offered here is not officially recognized or supported by any financial or governmental entity.
The Cuban peso continues its relentless march towards the abyss
A detailed article published yesterday by elToque describes what it calls a "severe turbulence" experienced by the foreign exchange market in Cuba in April.
"April 2024 marked a peak in the depreciation of the Cuban peso," stated elToque, noting that last month's surge in informal exchange rates represents the largest monthly depreciation of the Cuban peso so far this year.
In percentage terms, in April the Cuban peso depreciated more than 13% against the dollar and the euro, and more than 5% against the MLC.
During April, the rate increased by 5 CUP in a single day on three occasions in relation to the dollar, and twice in relation to the euro.
According to analysts from the Cuban Observatory of Currency and Finance (OMFi), the accelerated depreciation of the Cuban peso in April was due to four factors that are part of the economic and financial crisis the country is experiencing: "rising inflation, stagnation of production and exports, high fiscal deficit, and emigration."
In the first quarter of 2024, the categories of food, transportation, and alcoholic beverages recorded the most significant increases, with inflation rates considerably higher than the general CPI.
Another cause of the devaluation of the Cuban peso would be the slow recovery of tourism, the fact that goods exports have fallen short of expectations, and that the sugar cane harvest continues to struggle to stabilize its production, the mentioned independent media outlet emphasizes.
According to elToque, the wave of migration would also be an aggravating factor that shows no signs of abating and leads to additional demand for foreign currency in the informal market.
Trend towards devaluation may persist for the remainder of May
The OMFi models "predict that the depreciation trend could continue in May and forecast that the informal exchange rate could be around 417-427 CUP per dollar, 422-433 CUP per euro, and 316-324 CUP per MLC by the end of the month.
However, they also suggest that a decrease in the pace of the peso's depreciation is likely in the coming months.
As the informal price of foreign currencies continues to rise unchecked in Cuba, inflation remains out of control, leaving a bleak outlook where Cubans see their purchasing power erode day by day.
In the midst of this scenario, the Cuban regime seems to find itself in a dead-end, unable to offer economic solutions to the problem and opting to blame elToque for the devaluation of the CUP.
What do you think?
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