Cuba will buy dollars at a price five times higher than the official rate to capture foreign currency

First modification: 08/04/2022 – 18:28

The Central Bank of Cuba set a new rate of 120 Cuban pesos per dollar, compared to the official fixed rate of 24 pesos and 115 pesos in the informal market, for the purchase of foreign currency as a way to overcome its shortage of reserves.

The Minister of Economy, Alejandro Gil, clarified that “the exchange rate of 120 –Cuban pesos per US dollar– (…) is only for purchases. When we start buying and selling operations, we will have an exchange rate that will balance supply and demand.”

Cuba stopped accepting dollars in 2020 citing US sanctions and stopped selling convertible currency for pesos to the public soon after, claiming it had no foreign currency.

According to the official, the final objective now is to resume currency exchange, but the first step will be to capture the informal market and recover the purchasing power of those who earn their salary in Cuban pesos.

Cuba launched in January 2021 the so-called “Ordering Task”, an economic reform that included the devaluation of the Cuban peso, the end of the dual currency that existed on the island, the general increase in salaries and pensions and the reduction of subsidies.

Since then, the dollar and the euro, mainly, have increased their value in the informal market until they stabilized above 100 Cuban pesos.

Among the beneficiaries of the new measure, according to experts, could be tourists, who change their dollars at the official rate in hotels and then discover that they buy them much more expensive on the street than in the informal market.

With Reuters and EFE