Omar Everleny Pérez Villanueva is a professor in the Department of Economics and a researcher at the Center for the Study of the Cuban Economy at the University of Havana. Cuba Standard correspondent Andreas Knobloch talked to him about the causes and outlook of inflation in Cuba.
Earlier this month, the Cuban peso’s informal exchange rate rose briskly in a short time period, breaking the psychological 100:1 barrier for both the dollar and euro. What are the reasons for this fast rise?
There are several reasons. Most importantly, it was the reopening of borders, allowing Cubans to leave the country. They are leaving for two well-defined reasons: One, for external purchases in countries such as Russia, Mexico and Nicaragua, to supply a very depressed domestic market. Two, to emigrate; to illustrate this, while in all of 2021, 38,674 Cubans arrived at the U.S. southern border, just in the first weeks of 2022, there were 20,476 Cubans. In other words, with the state not selling any dollars, the informal market is occupying that space, and given the rising demand for dollars, there was great speculation. Those leaving for good are selling their assets to a large degree in Cuban pesos, but they need US dollars.
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