After a remarkable five-day stretch of unwavering average selling prices in the Cuban informal market, a significant shift occurred this Monday morning. One of the key currencies witnessed a substantial increase, sending ripples through the economic landscape. The freely convertible currency (MLC), in particular, rose by four pesos compared to its recent values, now standing at an intriguing 269 CUP. Meanwhile, euros and dollars maintained their positions as of the close of this report, with the US dollar still valued at 328 pesos and the euro at 345 CUP. Exchange rates play a crucial role in the Cuban economy, and this space provides a unique perspective beyond the official rates. It reflects the perceptions of citizens and the availability of foreign currency. The rates in the informal market often stand significantly higher than the official ones, intensifying the economic pressure on Cuban families. Although this period of stability offers some relief, experts caution that the informal market remains highly sensitive to external events. For instance, the arrival of remittances in December or potential announcements of changes in the country's economic policy, which typically occur at the end of the year during the sessions of the National Assembly of People's Power, can have a profound impact. Let's delve deeper into the equivalences of each available euro and US dollar bill to Cuban pesos (CUP). In the United States Dollar (USD) to Cuban Peso (CUP) conversion as of November 18, we see that 1 USD equals 328 CUP. This means that 5 USD amounts to 1,640 CUP, 10 USD is 3,280 CUP, 20 USD is 6,560 CUP, 50 USD is 16,400 CUP, and 100 USD reaches an impressive 32,800 CUP. For the Euro (EUR), the conversions are as follows: 1 EUR is 345 CUP, 5 EUR is 1,725 CUP, 10 EUR is 3,450 CUP, 20 EUR is 6,900 CUP, 50 EUR is 17,250 CUP, and 100 EUR is 34,500 CUP. The prestigious academic journal Applied Economics, renowned for validating innovative contributions in economics worldwide, has recently given its stamp of approval to the methodology used by elTOQUE in calculating the exchange rate in Cuba's informal currency market. In October 2024, the article "Using AI in the Informal Currency Market: Evidence from Cuba" was published on elTOQUE's website, describing the innovative application of artificial intelligence techniques and natural language processing (NLP) to calculate the Representative Rate of the Informal Market (TRMI). This recognition highlights the importance of the work done by elTOQUE, which has faced persistent attacks from the Cuban regime. The regime has tried to discredit its algorithms and analyses by claiming they are speculative and do not reflect reality. However, the evidence presented by elTOQUE continues to stand strong, providing valuable insights into the complex dynamics of Cuba's informal currency market.The Significance of Exchange Rate Fluctuations
Exchange rate fluctuations in the Cuban informal market have far-reaching implications. They not only affect the purchasing power of Cuban citizens but also have a direct impact on businesses and the overall economic stability. When currencies like the MLC experience significant increases, it can lead to higher costs for imported goods and services. This, in turn, can put pressure on local businesses that rely on imports to meet consumer demand. On the other hand, the stability of the US dollar and euro in the informal market provides a certain level of predictability for some transactions. However, even these seemingly stable currencies are not immune to external influences. The arrival of remittances in December, for example, can introduce a new dynamic into the market, potentially causing further fluctuations. Additionally, any announcements regarding changes in the country's economic policy at the end of the year can send shockwaves through the informal currency market. These events highlight the need for a comprehensive understanding of the factors that drive exchange rate movements in Cuba. By analyzing these factors, policymakers and economists can better prepare for potential challenges and work towards ensuring the stability and well-being of the Cuban economy.The Role of Artificial Intelligence in Calculating Exchange Rates
The application of artificial intelligence in calculating exchange rates in Cuba's informal market is a groundbreaking development. As described in the article "Using AI in the Informal Currency Market: Evidence from Cuba", elTOQUE has leveraged advanced techniques and natural language processing to develop a more accurate and reliable method of determining the Representative Rate of the Informal Market (TRMI). This approach takes into account a wide range of factors, including market trends, transaction data, and even social media sentiment. By analyzing these diverse sources of information, AI algorithms can provide a more comprehensive and up-to-date picture of the market. The use of AI not only enhances the accuracy of exchange rate calculations but also helps to identify patterns and trends that may not be apparent through traditional methods. This allows for more informed decision-making by businesses and individuals alike. Moreover, the recognition from the prestigious academic journal Applied Economics adds credibility to elTOQUE's work. It shows that their innovative approach is not only practical but also in line with the latest advancements in the field of economics. As the Cuban economy continues to evolve, the role of AI in calculating exchange rates is likely to become even more important. It provides a powerful tool for understanding and navigating the complex dynamics of the informal market.The Impact on Cuban Families
The higher exchange rates in the informal market place a significant burden on Cuban families. With the cost of imported goods and services increasing due to currency fluctuations, families have to stretch their limited resources even further. This can lead to difficult choices when it comes to purchasing essential items such as food, medicine, and household goods. The economic pressure on families is further exacerbated by the fact that their incomes are often tied to the official exchange rate, which is significantly lower than the rates in the informal market. This creates a disconnect between what families earn and what they need to spend in order to meet their basic needs. In addition to the financial strain, the informal market also creates a sense of uncertainty among Cuban families. They are constantly aware of the fluctuations in exchange rates and the potential impact on their finances. This can lead to anxiety and stress, as families worry about how they will be able to make ends meet in the face of these economic challenges. However, it is important to note that Cuban families have shown remarkable resilience in the face of these difficulties. They have adapted to the changing economic environment and have found ways to make the most of their limited resources. Despite the hardships, they continue to strive for a better life for themselves and their families.
