Dollar Surges in Cuba‘s Informal Market,Widening gap with Official Rate
Havana,Cuba – Teh US dollar has experienced a notable jump in Cuba’s informal market,reaching 425 Cuban pesos (CUP) this Sunday,marking a 20-peso increase in just four weeks and intensifying economic pressure on the island. This surge further widens the gap between the dollar’s value on the street (425 CUP) and the official rate of 55 CUP - a differential unprecedented in recent weeks.
According to reports, the dollar rebounded by five pesos in a single day, coinciding with the release of new pensions for retirees, effectively diminishing their purchasing power. Each increase in the dollar’s value represents a blow to Cuba’s already fragile economy, where the prices of the basic food basket now exceed 30,000 CUP per month, according to recent surveys.
The freely convertible currency (MLC) showed contrasting behavior, falling to 205 CUP after briefly rebounding to 210 CUP on Friday. This decline may be linked to adjustments in demand for currencies used to purchase goods in increasingly scarce state stores.
The upward trend began at the end of August, when the dollar traded around 405 CUP. While the first half of September saw gradual increases of one or two pesos,bringing the rate to 420 CUP,the second half of the month witnessed a more rapid ascent culminating in the current 425 CUP ceiling. Analysts note the dollar’s resistance to falling below 410 CUP and the Cuban peso’s inability to withstand demand.
If the current rate of increase continues, the dollar could close September around 430 CUP, exacerbating fears among Cubans that the currency will surpass 500 CUP by the end of the year. The rising dollar directly impacts the cost of living in an economy where essential products are largely dependent on currencies not used to pay workers by the government of miguel Díaz-Canel.
The coming week will be crucial in determining whether this jump is a temporary fluctuation or the beginning of a sustained upward trend in the Cuban informal market.