05 January 2026

Cuba’s Central Bank (BCC) has announced a new floating exchange rate, modified daily, based on supply and demand. The measure announced on 18 December is principally intended to enable private and state-owned exporting companies and certain other entities to buy foreign currency at “competitive prices.”

The decision has the effect of dividing the official exchange market into three regulated segments: the first two being the existing fixed rate of US$1 to CUP24, the second the Cadeca rate of US$1 to CUP120, and a new third floating rate which was launched at US$1 to CUP410. It is hoped that the new mechanism will lead eventually to the full convertibility of the Cuban peso (CUP).

Granma noted that the floating rate is being introduced at a time that is not ideal for the economy, and that “the full satisfaction of potential demand cannot be expected.” The express intention is, however, “to reach a rate that truly reflects the real conditions of the economy” and that “initially the rate must remain close to the one currently prevailing in the informal market.”

The much-delayed announcement of what is in effect a significant devaluation in the official rate of the Cuban Peso to the US Dollar, means that the BCC, according to the Communist Party’s official publication, will now “administratively mediate” the foreign exchange market. This, in effect, it reported will see the Bank intervene when necessary, acting “as just another competitor” in the market for the Dollar, Euro, and other convertible currencies.

This new approach will see the floating rate published daily by the BCC in its role as the country’s monetary authority. Apart from being available to non-state forms of management, forex through the new floating exchange rate will be accessible, and its use permitted under specific conditions to individuals, legal exporting entities, and those able to generate foreign currency for the country through their bank accounts.

After the announcement by the BCC, Pedro Carbonell, the Director of Macroeconomic Policy at the Central Bank, told Granma in an interview that the availability of foreign exchange in this way is intended to remove “any element of manipulation and speculation,” and provide an “attractive rate.”

He noted, however, the availability of foreign currency to purchase at the floating rate will depend on the availability at the bank, “which, as a rule, will only sell what it collects from purchases.” He said that in the initial stage, the limit of up to US$100 per bank transaction will remain in place, using the same mechanisms as at present, but as the market consolidates and new bank branches are opened across the country offering a cash purchase and sale service based on the floating rate, “the market itself will determine the relaxation of these controls.”

Carbonell also noted that the foreign currency purchasing power of non-state management entities will be limited to 50% of the average gross income as reflected in their tax accounts for the previous quarter.

Currency unification still some way off

The Cuban government and the BCC statements made clear that the eventual objective of unifying Cuba’s ever more complex highly regulated foreign exchange system is still some way off.

Overall currency unification, according to the BCC “can only be achieved gradually, through successive approximations” as a “sharp devaluation of the peso would have greater inflationary effects than those currently being experienced.” The present step “enables a better connection between the domestic and global economy; is intended principally to boost export activity; and for the entities involved to experience better financial conditions, “make investments, cover expenses in Cuban Pesos, and increase salaries,” Granma reported.

The guiding principle, the BCC said, will be “gradualism and temporality.” Movement towards exchange rate and monetary convergence it noted, will be based on macroeconomic stability, the operational capacity of the banking system, and a regulatory framework adjusted to current conditions.

To protect the population no sharp devaluation envisaged

Speaking on Canal Caribe, the Minister President of the Central Bank, Juana Lilia Delgado, said that the first two market segments of Cuba’s foreign exchange system will be maintained in such a way that there are no sharp devaluations of exchange rates. This she stressed is essential “to ensure the value of the national currency and the population is protected in basic and sensitive areas enabling stability and predictability in the price of essential goods and services.”

The third and new segment, she said, is intended to “incentivise the inflow of foreign currency into the exchange market, providing a source of funds for their operations …. reducing pressures and irregularities in the informal market.” As such, she told viewers, it forms a part of “a set of financial, commercial, tax and other measures, that aim to improve the efficiency of the economy.”

Other measures being implemented include:

• The stabilisation and progressive strengthening of freely convertible currency accounts (MLC) with the objective of strengthening the digital currency’s purchasing power and value in use. It is hoped that the new mechanism for managing, controlling, and allocating foreign currency will enable the MLC’s functionality to be recovered.

• The guaranteed operability of non-state management forms’ bank accounts, “allowing them to execute foreign currency transactions both internally and in foreign trade operations.”

• Legal access to foreign currency previously unavailable through the exchange market for non-state forms of management for investments or restocking via requests to their commercial bank and through the bank accounts that the new mechanism will allow them to create.

• Agreement on the direct purchase and sale of foreign currency if non-state forms of management can establish links with any other entity, such as suppliers of goods or services with available foreign currency

• The daily publication by the Central Bank of the exchange rates.

• The sale by Cubans of their Dollars, Euros and other currencies at banks and Cadeca at an “attractive” rate, without resorting to the informal market.

The initial official floating rate was set at levels almost identical to those published by the independent media outlet El Toque. On the same day as the official announcement, it was reported that El Toque’s website was unavailable on the island following a cyberattack. Earlier the Cuban government and media had alleged the platform was involved in politically inspired currency manipulation through its daily publication of informal street rates for the exchange of the Cuban Peso. (Background 15 December 2025).

New approach adds to complexity, economic uncertainty

The decision by the BCC and Government to take a gradualist, complex, and highly regulated approach to reform of the foreign exchange market rather than undertake overall unification and the huge devaluation this would imply, reflects a fear that any ‘once and for all’ approach at this time would damage further the already weak national cohesion and fuel the potential for social volatility and possible public protest.

In addition to the three official rates now in operation, the hoped for restoration in value of the MLC, the continuing existence of a variable street rate, the more general creeping dollarisation of the economy, and recent external developments, make less clear how long the gradual approach being taken will remain viable, or how and when the ultimate unification process might be sequenced or achieved. In short, much has yet to be explained. Although the likely outcome of Cuba’s latest attempt to bring order to its foreign exchange market, stimulate foreign exchange retention, and encourage exports and economic growth, could prove effective in the short term, it is unlikely to remove from investors and traders minds, doubts about Cuba’s future economic trajectory.

On 18 December, the official floating rate was launched at CUP410 to US$1, and CUP481.42 to €1. As at 2 January 2026 the rates stood at CUP466 to US$1 and CUP396 to €1.

Alonso warns economic outlook for 2026 may worsen as tensions increase

Cuba’s Minister of the Economy and Planning, Joaquín Alonso, has forecast that Cuba will experience 1% growth in 2026, a rate originally projected but not met in 2025. Cuba’s President has said separately that in the first three quarters of 2025 the economy contracted by more than 4%.

Addressing a shortened meeting of Cuba’s National Assembly held before Christmas, Alonso said that the “complex” economic scenario experienced in 2025 will persist, that tensions may worsen, and the “wartime economy” that the island is experiencing will continue to be subject to threats and risks.

The slight improvement is based, the minister said, on an expected improvement in visitor arrivals and the sales of medical and other international services abroad. Regarding inflation, he forecast that it is expected to result in a 10% increase in prices in the formal market, a figure lower than in 2025, but significantly less than the double-digit figure analysts say, prevails in the informal market.

Speaking days earlier at the also truncated eleventh plenum of the Cuban Communist Party, Alonso said that the Economic Plan for 2026 recognises the tensions that Cuba is experiencing and the need to mobilise all existing reserves to incorporate the challenges. He warned, however, that it had not been possible to project higher expenses than the income generated, and that “adjustment options” had been introduced to “reduce the deficit to a manageable level” against the background of a “war economy scenario” influenced by combined and accumulated internal and external factors, including the intensified US sanctions now affecting “all spheres of the Cuban economy and society.”

Cuba’s pragmatic economy minister told Central Committee members that in 2025 the limited financial resources available had been concentrated on meeting priority payments, including those for food, fuel, the maintenance, recovery, and development of the National Electric Power System, medicines, and on national defence and security. Despite this, he said, at an operational level management of the economy continued to be extremely complex, as “the resources have proven insufficient.”

Speaking about 2026, Alonso told Cuba’s second highest political decision making body that it will be a year in which this complex scenario will persist, with “threats, tensions and risks that we must be able to overcome, with our own efforts, with the resources available at each moment, with the reserves that we must mobilise and the opportunities that are also envisioned and managed.” The MEP minister also stressed in this regard that “it is not possible to project more expenses than the expected income” and that in calculating the budget for 2026 it was necessary to make “adjustments” to “key variables” to achieve a “manageable deficit”.

In his presentation, Alonso indicated that the total exports of goods and services projected for 2026 amount to US$9.969bn, exceeding the estimate for the current year by US$1.122bn based on goods exports of US$2.53bn and services exports of US$7.438bn. Speaking about imports, the minister said without providing further details, would be “concentrated on fuels and food,” with food imports exceeding 2025’s estimate by US$288mn.

05 January 2026, Issue 1307

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