Cubans struggle as peso loses half its value in a year on informal market

Record ID: 1736822

  • Title: Cubans struggle as peso loses half its value in a year on informal market
  • Date: 2nd August 2023
  • Summary: HAVANA, CUBA (AUGUST 1, 2023) (REUTERS) VARIOUS OF PEOPLE TAKING SELFIE PHOTOGRAPHS IN FRONT OF “CUBA” LETTERING VEHICLES TRAVELLING ON MALECON SEAFRONT, CAPITOL IN BACKGROUND BERLIN, GERMANY (AUGUST 1, 2023) (REUTERS) (SOUNDBITE) (English) LATIN AMERICAN POLITICAL EXPERT AT THE GERMAN INSTITUTE OF GLOBAL AND AREA STUDIES IN HAMBURG, BERT HOFFMANN, SAYING: “The relentless devaluation of the Cuban peso is widening the gap between those in Cuba who receive dollar remittances from emigrated family members abroad and those, many, who depend on state salaries in pesos and are finding it harder and harder to make ends meet in today’s Cuba. Politically, this growing social inequality strikes at the heart of the socialist government’s claim to legitimacy. Economically, the fall of the Cuban currency reflects the slow-motion collapse of the island’s productive economy.” HAVANA, CUBA (AUGUST 1, 2023) (REUTERS) SHOP ASSISTANT PUTTING PRODUCTS INSIDE BAG OLIVE OIL BOTTLES ON SHELF, PRICE TAG BEHIND PERSON GRABBING JUICE PACK FROM SHELF SHOP ASSISTANT REGISTERING PRODUCTS ON TILL TROLLEY BEING PUSHED THROUGH SUPERMARKET’S CORRIDORS
  • Embargoed: 16th August 2023 13:53
  • Keywords: Cuba Currency Dollar Economy Peso
  • Location: HAVANA, CUBA & BERLIN, GERMANY
  • City: HAVANA, CUBA & BERLIN, GERMANY
  • Country: Cuba
  • Topics: Currencies/Foreign Exchange Markets,South America / Central America,Economic Events
  • Reuters ID: LVA003159302082023RP1
  • Aspect Ratio: 16:9
  • Story Text: The Cuban peso was trading on the informal market at an all-time low of 230 to the dollar on Wednesday (August 2), slumping to half its value a year ago as consumers struggle with surging inflation and scarce goods, a widely watched tracker showed.
    The state considers the informal exchange rate, widely tracked via the independent news outlet El Toque, as illegal, but it has been unable to shut it down. The state officially pegs the local currency at 120 pesos to the dollar, but it has few to exchange.
    Cuban economists said the peso's plunge reflects a deepening four-year-old crisis in the Communist-run country that has been driven by a lack of convertible foreign currency and falling production.
    While authorities mainly blame tougher U.S. sanctions and the COVID-19 pandemic for the crisis, critics point to the slow pace of market-oriented reforms.
    A weak peso, the currency in which most Cubans are paid, undercuts the buying power of already paltry salaries that rarely top 5,000 pesos monthly, or $20 at the current exchange. The local cost of many goods imported in dollars also skyrockets as the peso plunges.
    Experts estimate 40% of Cuba's 11 million people rely entirely on pesos and have no access to dollars.
    (Production: Alexander Frometa, Mario Fuentes, Anett Rios, Carlos Carrillo, Anna Portella)
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2023. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
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