The parallel market exchange rate of the Cuban peso versus the greenback recently dropped to CUP200 per dollar, a level last seen in Oct. 2022, a report has said. Pavel Vidal, a former economist at the Cuban central bank, said the peso’s depreciation has caused the “impoverishment of the economy and families in dollar terms.”
Peso Down by More Than 20% in 2023
According to data provided by El Toque, the Cuban peso’s exchange rate on the parallel market recently matched an all-time low of 200 per dollar last seen in Oct. 2022. The peso’s latest plunge means the currency, which is officially pegged at CUP25:USD1, has now depreciated by over 20% in 2023 alone and by more than 50% in under 12 months.
As per a report, the peso’s latest plunge has further eroded the purchasing power of Cuban salaries which rarely exceed an equivalent of $25 or 5,000 pesos per month. The currency’s accelerated depreciation is coming at a time when the country’s leader, Miguel Diaz-Canel, has joined other world leaders in advocating for an alternative to the U.S. dollar.
Commenting on the likely impact of the Central American state’s ongoing currency woes on the population, Pavel Vidal, a former economist at the Cuban central bank, said the peso’s depreciation has left many residents worse off.
“The exchange rate shows the impoverishment of the economy and families in dollar terms,” Vidal, a tutor at Colombia’s Pontificia Universidad Javeriana Cali, said.
Although Cuba is reported to have carried out some market reforms, Vidal insisted that such reforms have failed to boost domestic production. The tutor also argued that the market reforms had failed to contain inflation.
However, Cuban officials including President Diaz-Canel have consistently blamed the country’s economic woes on sanctions imposed by the U.S. in the 1960s.
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