Cuban peso reaches an all-time low compared to the US dollar in unofficial markets.

Cuban Peso Hits Record Low Against U.S. Dollar

HAVANA – On Wednesday, the Cuban peso plummeted to a new low against the U.S. dollar in the informal market, amid heightened economic pressures. These pressures have been exacerbated by oil import restrictions imposed during the Trump administration.

El Talk, an independent news outlet, reported that the currency reached 500 pesos to one dollar through unofficial means, a significant increase from about 400 pesos last summer. This unofficial rate is often negotiated in WhatsApp groups and it’s widely used, especially among individuals bringing cash from the U.S. and Europe. Many experts consider this unofficial rate a barometer of Cuba’s economic condition, despite the government’s efforts to maintain strict economic control.

The economic and energy crises in Cuba have worsened over the past five years, primarily due to longstanding U.S. sanctions, coupled with a significant decline in the peso’s value. Meanwhile, other Caribbean economies are increasingly embracing the dollar.

“It’s clearly not good news,” remarked Ricardo Torres, an economist at American University in Washington. “A lot of goods are already being sold directly in dollars, even though the majority of Cubans lack a stable income in that currency.”

This sharp depreciation of the Cuban peso in the informal market is making life even harder for residents. The average state salary hovers around 7,000 Cuban pesos—roughly $14 in the informal market—while a carton of eggs costs about 3,000 pesos.

Cuba operates with three official exchange rates that many find confusing, varying from 24 pesos per dollar for select commercial transactions to a new rate introduced at 455 pesos per dollar to compete with the unofficial market. Nevertheless, most people tend to rely on the informal market.

Following a U.S. military operation in Venezuela on January 3, the peso began to lose value more rapidly. After the ousting of former President Nicolás Maduro, U.S. President Trump announced a stop to Venezuelan oil exports to Cuba, cutting off a vital ally. On that operation day, the currency was around 438 pesos to the dollar.

In late January, President Trump further threatened tariffs on nations supplying fuel to Cuba and pushed Mexico to stop shipments, although Mexico has continued to provide support in other areas. What ensued over the next few days was a gradual chaos.

Last week, the Cuban government declared it would only sell limited amounts of gasoline priced in dollars and other foreign currencies. The country announced there wasn’t enough oil available to refuel planes, leading to the cancellation of flights crucial for tourism, which is a major economic driver for the island.

Public transportation in Havana has been severely reduced. Outages have become more frequent and prolonged, affecting daily life. Banks have cut back their operating hours, cultural events have been canceled, and many classes have shifted to remote formats.