Cuba’s informal currency exchange market has experienced notable fluctuations in recent months, reflecting the nation’s ongoing economic challenges and the devaluation of the Cuban peso (CUP). As of early June 2025, the U.S. dollar (USD) is trading at approximately 365 CUP, the euro (EUR) at 375 CUP, and the Freely Convertible Currency (MLC) at 265 CUP. These rates indicate a continued trend of currency devaluation and underscore the complexities of Cuba’s financial landscape.
The MLC, introduced by the Cuban government in 2021, is a digital currency pegged to the U.S. dollar and used primarily in state-run stores. Its value has been particularly volatile, reflecting shifts in both domestic economic policies and international market conditions. For instance, in April 2025, the MLC experienced a significant increase, rising to 265 CUP, a four-peso increase from the previous day. This surge was attributed to increased demand from individuals seeking to convert MLC back into Cuban pesos for daily expenses. (world-today-journal.com)
The U.S. dollar and euro have also seen fluctuations. In April 2025, the dollar remained stable at 365 CUP, while the euro held steady at 375 CUP. These currencies are in high demand due to their acceptance in various transactions and their role in remittances, which are vital for many Cuban families. The stability of the euro, in particular, may be influenced by broader international currency markets and the availability of euros sent via remittances. (world-today-journal.com)
The Cuban peso’s devaluation has been a significant concern for the population, leading to increased inflation and reduced purchasing power. This economic instability has prompted many Cubans to rely on the informal currency exchange market to access foreign currencies, which are essential for purchasing goods and services not readily available through state-run channels. The government’s partial dollarization strategy, which began in early 2025, aims to address the cash shortage by allowing certain stores to accept U.S. dollars. However, this move has highlighted existing inequalities, as access to dollars is limited to those with foreign currency, leaving others at a disadvantage. (reuters.com)
The informal exchange market’s dynamics are influenced by several factors, including remittances, economic crises, government policies, tourism, and the ongoing U.S. embargo. Remittances, primarily in USD and EUR, continue to be a major driver of the informal market, providing a crucial source of foreign currency for many Cubans. The economic crisis, characterized by shortages of essential goods, has increased demand for foreign currencies. Government policies, such as the dual currency system and restrictions on access to foreign currency, contribute to the thriving informal market. While tourism is recovering, it remains below pre-pandemic levels, limiting the inflow of hard currency. The U.S. embargo continues to restrict Cuba’s access to international financial markets and trade, further complicating the economic situation. (world-today-journal.com)
In response to these challenges, the Cuban government has taken steps to stabilize the economy, including the partial dollarization strategy and efforts to unify the currency system. However, these measures have not fully addressed the underlying issues, and the informal currency exchange market remains a critical component of the Cuban economy. The situation underscores the need for comprehensive economic reforms and international cooperation to address the structural challenges facing Cuba’s financial system.
As the Cuban economy continues to navigate these complexities, monitoring the trends in the informal currency exchange market will be essential for understanding the broader economic landscape and the well-being of the Cuban population.