Monday, December 11, 2023

The dollar marked the third historic maximum in a week

The American dollar (USD) marked its third consecutive historical maximum in seven days when it was quoted in 255 Cuban pesos (CUP) in the island’s informal market, exacerbating the sharp depreciation experienced by the local currency since the reform of the 2021 order.

According to the independent media index The toucha benchmark in the informal market registered this Friday a new record after last Saturday’s 252 CUP per dollar and 253 on Monday, after the local currency remained stable at 250 for about two weeks.

The euro also marked a new record of 262 CUP, while the freely convertible currency (MLC)—a Cuban virtual currency based on the dollar and used in state stores—remains at 230 CUP, according to The Touch.

The depreciation of the Cuban peso has worsened in recent months. Yes, a year ago, the US dollar was exchanged for 165 CUP in the informal market; last June, it came to 200 CUP. In August, it reached 250 CUP, then impressed for a while, but now it has completely broken that barrier.

This drop is the opposite of official exchange rate stability, which has remained stable for more than a year at 24 CUP per dollar for legal entities and 120 CUP per dollar for individuals and the retail sector.

The need to import 80% of what the country consumes, the strong migratory pressure (which needs dollars to pay the mafias), and the uncertainty caused by the severe crisis are some of the main reasons that explain the current partial dollarization of the Cuban economy and the resulting depreciation of the CUP.

she The Cuban government has acknowledged the failures several times in the design and implementation of the 2021 reform, called the Order Task, which seeks, among other issues, to end the currency duality that used the CUP and the convertible peso (CUC), equivalent to the dollar.

informal marketthe majority of the island, where many people stock up on dollars because of the restrictions on buying them in state exchange houses, where they only sell up to 100 USD per person per day, depending on daily availability.

The index of The touch Almost 2,000 daily ads are taken as a reference for buying foreign exchange on different Cuban websites to establish their reference exchange rate. In the absence of another type of official indicator, this index becomes a reference on the road and for the economists who study the island.

In the middle of May, a month after the Cuban government announced that Cubans can once again deposit dollars in cash into their bank accounts, the Cuban State Exchange House (CADECA) announced that the money purchased in these establishments can also be deposited with magnetic cards, the only payment method allowed to buy in shops with freely convertible currency in the country. Since then, the customer can choose whether to buy foreign currency in cash or put it almost on cards.

From that decision, Cuban economist Elías Amor already saw this increase in the value of the dollar. “Flooding the Cuban economy with dollars is a bad decision for the stabilization policy announced by the regime. The ordering task was asked again, and everyone remained calm. We will see the announced injuries soon. Watch out for informal exchange rates. You will see,” he warned on his blog.

World Nation News Desk
World Nation News Desk
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