The Freely Convertible Currency Joins the Decline of Foreign Exchange in Cuba
The Freely Convertible Currency (MLC) has joined the decline that has characterized the dollar and the euro this week in Cuba’s informal market. The controversial electronic currency used by the government in stores and services under this modality has fallen to 300 CUP, five units less than it has held since June 27, when the MLC reached this average selling price.
After eight days of stability, the Freely Convertible Currency is now part of the moderate decline that the dollar (currently stable at 350 pesos) and the euro (which remains at 360 CUP) have experienced. Since the independent media outlet elToque began documenting price fluctuations in the informal market for these three reference currencies in Cuba, the MLC—created in 2019 by the regime to attract foreign currency—has always been significantly lower than the dollar and the euro in its average informal selling prices.
Current Exchange Rates
Exchange rate as of 03/07/2024 – 7:16 a.m. in Cuba:
USD to CUP according to elToque: 350 CUP.
EUR to CUP according to elToque: 360 CUP.
MLC to CUP according to elToque: 300 CUP.
The informal exchange rate in Cuba provided here is not officially recognized or backed by any financial or governmental entity.
The Government vs. Small and Medium Enterprises
The drop in the price of the MLC occurs amid the ongoing struggle between the government and small and medium-sized enterprises (Mipymes), following the government’s decision to cap prices of essential products sold in the retail network. This measure has caused significant discontent in the private sector of the Cuban economy. “If they want essential goods to keep coming in, this is not the way,” warned an entrepreneur about the decision to cap the prices of six basic products sold by the private sector.
According to the prior announcement, the centralized pricing system will start with chicken, oil, powdered milk, pasta, sausages, and powdered detergent, aiming to contain the rampant inflation gripping Cubans. In mid-March, Miguel Díaz-Canel promised a set of economic measures to “correct distortions and boost the economy.” He stated that prices would remain high but that “abusive or speculative prices” would not be allowed.
Currency Conversion Rates
Equivalents of each available bill of euros and U.S. dollars to Cuban pesos (CUP) according to the exchange rates of Thursday, July 4:
U.S. Dollar (USD) to Cuban Peso (CUP):
1 USD: 350 CUP.
5 USD: 1,750 CUP.
10 USD: 3,500 CUP.
20 USD: 7,000 CUP.
50 USD: 17,500 CUP.
100 USD: 35,000 CUP.
Euros (EUR) to Cuban Peso (CUP):
1 EUR: 360 CUP.
5 EUR: 1,800 CUP.
10 EUR: 3,600 CUP.
20 EUR: 7,200 CUP.
50 EUR: 18,000 CUP.
100 EUR: 36,000 CUP.
FAQs on Cuba’s Informal Currency Market
Here are some frequently asked questions about Cuba’s informal currency market, which may help readers understand the current situation better.
Why has the MLC joined the decline in Cuba’s informal market?
The MLC has joined the decline due to the overall economic instability and the government’s recent measures to cap prices on essential goods, which has affected the private sector’s confidence and operations.
What is the current exchange rate for MLC to CUP?
As of July 3, 2024, the exchange rate for MLC to CUP is 300 CUP according to elToque.
How are the informal exchange rates in Cuba determined?
The informal exchange rates in Cuba are determined by supply and demand dynamics in the informal market and are documented by independent media outlets like elToque. These rates are not officially recognized or backed by any financial entity.
What impact do government price caps have on the private sector in Cuba?
Government price caps on essential goods have caused significant discontent and operational difficulties in the private sector, as entrepreneurs struggle to maintain profitability under the new restrictions.
