Disastrous first week of Cuba’s socialist currency reform: Dollar exchange skyrockets to 50 Cuban pesos

Mural in Havana bids adieu to the CUC currency

From our Bureau of Socialist Voodoo Economics

Adhering irrationally to socialist ideology, Castrogonia’s financial geniuses have devised a socialist “currency reform” program that is totally detached from free markets, the country’s GDP (gross domestic product) and the law of supply and demand.

The immediate result is an instant market devaluation of the new Cuban Peso, which is pegged to the value of the U.S. dollar. So, instead of having to pay 24.5 pesos for the Dollar, as Castro, Inc. had artificially demanded, the exchange amount has climbed to 50 pesos in just a matter of days.

And this is only one of many, many problems being caused by the “currency reform”, one of which is the likelihood of a monstrous inflation rate, much like that experienced in the Cuban colony of Venenozuela.

Vamos bien!

Loosely translated from Diario de Cuba:

One week after the start of the so-called Ordinance Task, the dollar is sold on the black market for approximately 50 Cuban pesos (CUP), more than double the rate set by the island’s authorities.

After a review of the offers on the Cuban buy and sell page Revolico, DIARIO DE CUBA was able to verify that most of the proposals range around 50 Cuban pesos or 1.80 CUC.

But the forecasts of the specialists suggest that the value of the dollar with respect to the CUP will grow even more, so one of the currency sellers that is advertised in Revolico urges buyers to “take advantage” of the moment, because in the month of February “will be more than 80 CUP,” he wrote.

A Cuban resident in Havana, who preferred to reserve his identity, told DIARIO DE CUBA that in the last week of December the exchange rate of the dollar against the CUC in the informal market was between 1.50 CUC and 1.80 CUC per dollar.

Despite the fact that the price of the dollar in the so-called “black market” began to skyrocket long before the start of the monetary unification process on the island, the forecasts suggest that it will now grow the most, as the shortage of currency markets national currency and the constant expansion of foreign exchange offers will only speed up the process.

Another factor that influences the fall of the Cuban peso with respect to currencies is the shortage of foreign currencies that the country has, so in mid-December the Government announced that Cubans will not be able to buy dollars or other currencies in the entities banking except in exceptional cases.

“There are no possibilities today to buy freely convertible currency, because there is not enough availability to sell those currencies to the population, so today there is no free access,” said the Minister President of the Central Bank of Cuba (BCC), Marta Wilson González, in the television program Mesa Redonda.

Emilio Morales, president of the consulting firm Havana Consulting Group, predicted that the current rate will not last long, since “they have launched the measure without having released the productive forces and without releasing prices, (…) the State has set prices without taking into account The dynamics of the market is taken into account. Therefore, the measure was born lame, and far from becoming a positive regulator to try to clean up the economy, it will become a real drag that will accelerate its current process of collapse, “he said.

Continue reading HERE in Spanish

1 thought on “Disastrous first week of Cuba’s socialist currency reform: Dollar exchange skyrockets to 50 Cuban pesos”

  1. Everyone knows this is largely irrelevant, since Castro economics are chronically and incurably fucked up–the only cure being getting rid of Castro, Inc. Cubans on the island know they can either resort to the “diaspora” for help or leave Cuba, but they know better than to expect much from the Castro system.

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