Cadeca Denies It’s Selling the US Dollar at 375 Cuban Pesos

While the price of the US currency has fallen from 395 to 345 pesos since May 9, the official rate remains at 120 pesos.

By 14ymedio

HAVANA TIMES – Cuba’s network of currency Exchange Houses (Cadeca) denied this Friday that its branches will begin to sell US dollars at a rate of 1 for 375 pesos, instead of the rate of 120 currently in force. False information had circulated on social networks and alerted part of the population, forcing the state entity to clarify the situation.

“Any information received about our entity or its services from a source other than our official channels is totally false and unfounded,” Cadeca posted on its social networks.

The price of the dollar keeps the population tense due to its sudden drop to 345 pesos, according to El Toque, after having reached 395 on May 9. The fluctuation has occurred in the midst of a campaign to discredit El Toque in the official press, which accuses it of manipulating the exchange market at will and participating in a plot to provoke a social outbreak.

As Banco Metropolitano said on its social networks, the campaign – allegedly paid for by the US – aims to reach the bar of 400 pesos for one dollar on the third anniversary of the social outbreak of 11 July 2021. Along with the US currency, the euro and the freely convertible currency (MLC) have also plummeted, which are at 360 and 290 pesos respectively.

A similar drop occurred last September, when 14ymedio recorded a fall from 250 to 215 pesos. The swing did not last long, and soon the dollar regained its upward trend.

El Toque, a medium that publishes daily informal market rates, considers that the current decline in the dollar is a common “temporary correction” and believes that the restoration of Western Union remittances, which occurred precisely on May 9, could “influence the expectations, the so-called ’market sentiment’.”

According to a report recently published by the Observatory of Currencies and Finance of Cuba (OMFi), economist Pavel Vidal – the researcher of the tool created by El Toque – estimates that “a growing number of people have begun to consider that the price of foreign currencies “It was excessively high and chose to sell before a possible fall.”

For Vidal, the fluctuation is nothing more than a “temporary” decline, since problems and distortions persist in the Island’s economy that do not allow the Cuban peso to recover. The high fiscal deficit, the high issuance of unbacked banknotes, the contraction of national production and exports, dependence on imports, dollarization, emigration and generalized inflation (32.3% year-on-year this April), are some of the conditions that make it impossible to contain the depreciation of the national currency.

In addition to the crisis that Cuban banks face due to the lack of liquidity, both in foreign currency and pesos, they now also have to worry about external factors that not only worsen their management, but also worsen their attention to the population. This Friday, the Banco Popular de Ahorro (BPA) of Sancti Spíritus published a note in which it warned that as of May 25, “BPA branches throughout the province will not serve customers on Saturdays.” The cause: “The electrical problems that are affecting the country.”

Translated by Translating Cuba.

Read more from Cuba here on Havana Times.