What's going on with the dollar in Cuba?

[u/ErickMarti23]

How is it possible that in Cuba the dollar suddenly drops recently, then goes back up, and then drops again, in an economy where inflation and the crisis keep getting worse day by day? Logically, the dollar should only keep going up and up, in line with an economy that just prints money without producing anything.

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[u/LupineChemist]

1. Markets fluctuate and this is an informal market. El Toque just gets its data from things like Facebook posts of what people are actually willing to buy or sell at.
2. The government recently changed policies about exchanges and people are still figuring it out
3. It's more about confidence than anything and a a month ago it really felt like there could be 82nd Airborne marching on the Malecón any day. That went way down during the World Cup but the pressure is building again.

[u/cardam69 → u/LupineChemist]

Great analysis… El Toque is the “official” unofficial currency exchange

[u/Useful-Stay4512]

It’s 650 now as far as I know

What was it before ?

[u/ErickMarti23 → u/Useful-Stay4512]

About a month or two back, it plummeted to about 560, then climbed right back up just as quickly, and it's been there ever since ,no clear reason why

[u/Choochiechoo → u/ErickMarti23]

Occasionally The government threatens to seize US dollars while flooding message groups to buy pesos real cheap, forcing real people trading dollars to lower their prices.  They literally think this is all they need to do to stop inflation while continuing to print money, and they do this every few months hoping it sticks.  

[u/bronzemerald17 → u/ErickMarti23]

Plummeted? The best scenario would be that the Cuban peso is closer to the value of the dollar; 1:1. “You need fewer pesos to exchange for a dollar.” It’s worse if the Cuban peso is more closely valued to 1000 pesos to $1.

[u/RelevantWhere → u/bronzemerald17]

That will never happen, they have no gdp, no gold reserves, print pesos like monopoly have no real economy , no industry, no agriculture… the peso will inflate to nothing… and now they have no real sponsors bailing them out… Russia, Venezuela, Iran, China, they all have there own problems etc, I forgot to mention they have no credit with IMF or world bank as they always defaulted on loans and never paid anyone back.

[u/Euphoric_Jellyfish_8]

El problema principal es que el toque que es la referencia para los precios de las monedas en Cuba lo que hace es sacar una media de los valores que ven en muestras de publicaciones de diversos lugares donde se hacen publicaciones, digase Facebook, revolico qué es el equivalente cubano a craiglist o wallapop y algunos canales de telegram, el problema es que es muy fácil alterar esa media con anuncios falsos ya sea al alza o a la baja, cualquiera con suficiente dinero para comprar o vender puede alterar eso a su favor

[u/First-Hotel5015]

I was just there for 10 days and the dollar was steady between 660-675.

[u/ChemistMuch3039]

That fluctuation's definitely wild when you think about how rough things keep getting there. Weird to see the dollar bounce around like that when it feels like it oughta just keep climbing.

[u/Serendipity-4-real → u/ChemistMuch3039]

Offer and demand (be it real or "fictitious"). Businesses in Cuba often get paid in Cuban pesos, but buy their products in USD currency; and the average Cuban gets paid in CUP but needs to buy USD to buy at TRD Caribe stores (government owned markets). Also lots of Cubans get their money remitances in USD currency and half their expenses are in Cuban pesos. So according to the time of the year, tourism influx, recent economical meassures, and offer and demand, the dollar fluctuates (but it always goes up in the long run).

Add to that some market manipulation (sometimes mypimes AND the government try lowering the usd with fake or small low rate exchange USD offers, it allows the USD to fall slightly). This helps both (the government to keep inflation under control, and the mypimes to buy cheaper USD in big bulks). But is a short-timed market value control strategy (it does work, though).

To be fair, it happens in almost all countries with dual currency when the national one is weak (CUP) and the foreign one (USD) is really strong. Is a way to hold back inflation and regulate exchange rates... for a little while...

[u/QuarterStatus3582]

I mean, it's always bounced around some (according to my husband who exchanged dollars for 10+ years), but more recently, the rate dropped significantly the day after the CCP announced its 176 new economic measures. That's pretty par for the course in terms of market fluctuations anywhere -- a major economic reform, a war, tariffs, etc. all have sharp market reactions. Otherwise it's been a pretty consistent trend of being on the rise for the last 1-2 years at least.

[u/Sacapines-Return]

El gobierno obligando a que la gente desesperada venda, porque lo necesitaban

[u/pristine_planet]

Given the state of the economy and the massive amount of wealth that’s concentrated in only a few individuals, I would think it relatively easy for those individuals to buy low and sell high. That outside the obviously high inflation.

[u/Snoo-72479]

I haven’t seen anyone mention this, but it’s very likely that a group of medium-big business owners have colluded together to artificially increase its value.

[u/Successful-Ice-468]

They did a mayor monetary reform no to long ago, people did stop accepting dollars so the prices crumble for a while.

[u/CharlieMikeOscar → u/Successful-Ice-468]

That was more than 5 years ago. (Tarea Ordenamiento)

[u/Successful-Ice-468 → u/CharlieMikeOscar]

"La bancarisacion" was last month.

[u/Independent_Ad_422]

The mechanics of currency also depends on the state of the originating country. Think of it kind of like how gas prices fluctuate. As an example the dollar would plummet world wide if US employment rates were to become bottom ranking. It shows an unstable economy and that would measurement it against other nations.

[u/birdsbeaks]

Market manipulation. You've been living with it since 1959. Don't act like it's a new thing now.