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Crisis deepens on the island
The Cuban peso has crashed to its lowest level ever against the United States dollar on the informal market, underscoring the deepening economic crisis in Cuba. According to Associated Press reporting, locals now see rates hit record lows in unofficial exchanges—a stark barometer of stress in an economy wrestling with inflation, fuel shortages and tightening United States sanctions.
In Havana’s bustling back-street currency chats—the WhatsApp groups and side-street deals where most real-world exchange actually happens—the dollar now buys far more pesos than ever before. That gap between official exchange rates and the informal market reflects not just financial mechanics but lived reality: Cubans who earn in local wages are feeling the squeeze as prices soar and purchasing power collapses.
This meltdown didn’t come overnight. Partial dollarisation—where businesses increasingly price goods and services in dollars—has gained ground, fuelling inequality and dividing those who can access hard currency from those who can’t. Critics of the government’s slow-burn reforms argue that without bold structural change, this trend will only deepen.
Economists warn that when local money weakens this sharply, it ripples across everyday life: Rising costs for basics, eroded savings, and wider gaps between haves and have-nots. Already, average wages translated into dollars paint a stark picture of diminishing buying power.
With tourism shrinking amid fuel and travel woes and sanctions tightening, analysts say Cuba’s monetary fragility could shape economic policy for years. The peso’s freefall is more than a financial metric—it’s a vivid signal that the island’s economic challenges are far from solved.
