Saturday, February 24, 2024

The dollar and euro break records and confirm the collapse of the Cuban peso

The US dollar quote broke another record this Saturday to reach an average of 300 pesos per dollar, similar to that reached by the euro last Tuesday, confirming the collapse of the purchasing power of the Cuban peso (CUP).

On December 31, 2023, the CUP was exchanged at 265 per dollar; that is, in the 40 days that passed in 2024, the dollar increased by 35 pesos, almost one per day.

Meanwhile, the Freely Convertible Currency (MLC), which Cubans receive as deposits on magnetic cards associated with foreign currency bank accounts,. It remains at 260 pesos. However, this rate is also expected to increase due to rising currencies.

On Tuesday, the euro reached 300 pesos.

After these climbs, the Cuban peso ranks as the seventh currency with the least value worldwide, worse than Venezuela’s currency, the bolivar, which in 2023 lost 51% of its value against the dollar.

As of February 1, the Cuban peso has already shown a year-to-year drop of 77% against the dollar.

Behind the Cuban peso is the Zimbabwe dollar (year-on-year decrease of 1,347%); the Argentine peso (241%); the Egyptian and Sudanese pounds (both down 131%); the Syrian pound (122%); and the Nigerian naira (90%), according to economist Steve Hanke of Johns Hopkins University.

At the end of January 2023, each unit of the US currency is worth 160 pesos, each euro 165, and the MLC 157, setting a series of historical records since then.

While the prices of almost everything in consumer goods continue to rise.

By the end of 2023, an inflation rate of 31.34% was recorded on the Caribbean island, mainly due to the increase in restaurants, transportation, and food, according to the National Office of Statistics and Information (ONEI).

This strong price increase follows that recorded in 2021, when ONEI put inflation at 77.33%, and the 39.07% rebound in the formal Cuban market in 2022.

“An official annual inflation of approximately 30% is a very high inflation that continues to systematically reduce depressed purchasing power,” said Cuban economist Pablo Monreal.

Cuba imports 80% of what the country consumes.

For about three years, Cuba’s very poor economic situation worsened with the lack of basic products, the depreciation of the peso, the failure of public services, and inflation.

World Nation News Desk
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