Cuban peso worth 80% less today than a year ago

From our Bureau of Unbearable Pain with some assistance from our Bureau of Sinking Ships Kept Afloat by Sugar Daddies and Friends

Twice this week we have posted stories about the record levels of devaluation sustained by the Cuban peso in recent weeks. These record levels of Dollar and Euro exchange rates are reflections of a much larger and more dismal problem, which is the 80% devaluation of the Cuban Peso over the past year. This loss of purchasing power, coupled with rampant inflation and stagnant salaries are an unprecedented disaster in the 65-year history of the Castro dictatorship. Cubans on the island are now facing a crisis unlike any other, and Castro, Inc. has no solutions to offer.

Can things get worse? Yes, of course they can, and of course they will. Does this mean the end of the so-called “Revolution”? No way. Castro, Inc. has not hit bottom yet. It has too many sugar daddies and friends abroad who will keep it in power, and too many home-grown esbirros on the island willing and eager to smash their neighbor’s skulls, squelch dissent, and prevent real change.

Loosely translated from CiberCuba

Throughout the course of a year, the Cuban peso has experienced a historic devaluation, with the dollar rising from 182 to 330 CUP and the euro from 185 to 338 CUP, marking increases that exceed 80%. This devaluation has critically eroded the purchasing power of the Cuban population, negatively impacting both salaries and savings. Detailed information by CiberCuba, thanks to the daily exchange rate data provided by elTOQUE, highlights how the currency instability underscores an acute economic crisis in Cuba, accentuated by the absence of effective policies to mitigate the peso’s fall.

In 2023, the average salary in Cuba, approximately 4500 CUP, was equivalent to about 24.73 dollars or 24.32 euros. However, by 2024, the same amount represented only 13.64 dollars or 13.31 euros, a significant loss illustrating the devastating impact of inflation and monetary devaluation on Cuban workers.

For those with savings in the national currency, the impact of devaluation is profoundly significant. Considering the case of someone who, in 2023, had saved 182,000 Cuban pesos—equivalent then to 1000 dollars according to the black market exchange rate—the value of those savings in 2024, with the exchange rate rising to 330 CUP per dollar, would decrease drastically. Those same 182,000 CUP, adjusted to the new rate, would represent only about 551.52 dollars, highlighting a direct loss in the value of savings in foreign currencies and demonstrating the drastic devaluation of the Cuban peso.

Even worse is the case of someone with 1 million Cuban pesos saved. This amount, which was equivalent to approximately 5,494.51 dollars or 5,405.41 euros in 2023, was reduced to 3,030.30 dollars or 2,958.58 euros in 2024, reflecting a considerable loss in its value in foreign currencies.

The critical economic situation and the accelerated devaluation of the national currency are clear symptoms of the deep flaws in the centralized and planned economic model imposed by the Cuban regime. This system, devoid of economic freedoms and bound by outdated ideological principles inherited from the Soviet era, has proven ineffective in addressing the basic needs of the population and adapting to global market dynamics.

The government’s insistence on clinging to these principles, at the expense of economic openness and the inclusion of more flexible market practices, has led the Cuban people to a situation of misery and hopelessness. The lack of effective measures to stabilize the economy and improve the standard of living of citizens reflects not only an economic crisis but also a leadership crisis, where ideological dogmas are prioritized over the well-being and prosperity of the Cuban people.

This approach has exacerbated the currency and economic crisis, leaving the population extremely vulnerable to inflation and loss of purchasing power, while viable and necessary solutions continue to be ignored by an administration clinging to a past that has repeatedly shown its failure.

Continue reading HERE in Spanish