Cuban money business

Finance in Cuba is a subject that needs additional explanation. Payment in Cuba is also a very dynamic subject that can change quickly. In this article, we will update you on the most important issues regarding payments in Cuba in 2023.

Official exchange rate

You get the official exchange rate when you exchange euros or dollars at banks and exchange offices. There is a fixed and official exchange rate and it again depends on the euro-dollar rate how many pesos you get for your euros. It is almost impossible to exchange only according to the official exchange rate. This does not reflect the actual value of the euro or dollar. The journey is very expensive if you only change via official channels.

Informal exchange rate

The informal exchange rate is the amount of Cuban pesos that Cubans pay for euros or dollars, for example. Cubans have a strong need for hard currency for several legitimate reasons. The dollar is the most desired currency, but euros can be exchanged very well in Cuba on the informal market. There are several online platforms where Cubans find each other if they want to exchange. The informal exchange rate is very volatile, but rises very quickly at times. Sometimes a dollar or euro can certainly be worth double here.

To enter the informal exchange market as a foreigner, you must of course use your common sense. We recommend only exchanging money through the casa owner, guide or driver. You don't know if you're dealing with a trustworthy person when you change on the street. Cubans will never give you the full informal exchange rate. They withhold some pesos on this. For example, when the informal exchange rate is 240, you will receive approximately 210 CUP per euro from them. Because the exchange rate is quite erratic, they build in a margin of certainty that they do not lose with the exchange. You can also look at this as a commission to compensate for this service. This is very common in Cuba.

The height of the informal rate indicates how high inflation is in Cuba, and travelers will have to deal with this anyway.

Economy with two currencies

After 20 years of having a 2-currency economy, it stopped in 2021. Everyone used the same currency so you would think that paying has become easier now. Unfortunately, this is not the case.

Since the CUC was abolished in 2021, the prices of goods and services in Cuba have risen rapidly and inflation is high. Although salaries and pensions of Cubans have increased, they can buy less and less due to the high inflation.

Introduction of the MLC

Some time after the abolition of the CUC, a new digital currency was introduced: the MLC. This digital currency is equal in value to the dollar. In certain state shops you can only pay in MLC. Think, for example, of shops with food and household appliances. This currency is digital and products sold in MLC can only be paid for with a payment card. You can only purchase the MLC with foreign currencies such as the euro and dollar. Cubans are paid their salary in Cuban pesos, but you cannot purchase MLC with this currency. There are several legitimate reasons why Cubans need foreign currency, and buying the MLC is one of them.

What else should you know about paying in Cuba?

· Money that you exchange for Cuban Pesos cannot be exchanged back to euros. Don't change everything at once and don't change too much. Start with, for example, 100 euros.

· The monetary reform in Cuba has made it even more important for travelers to arrange and book as much as possible before departure. Once in Cuba, you only have to exchange money for smaller expenses.

· Very important: take enough cash with you for your expenses. ATMs do not work in 95% of cases, or are often empty. Partly due to the high inflation, Cubans, as soon as they receive their salary, withdraw as much as possible from their account, which means that ATMs are often empty.

· If you withdraw money or pay with a credit card, you always must to deal with the official exchange rate.

· We strongly advise against changing money on the street in the informal market. Always do this through a reliable intermediary.

· In principle, Dutch debit cards do not work in Cuba. Always take a credit card from Mastercard or Visa with you (always check whether the issuing party allows payments / debit cards in Cuba).

· Make sure you always keep some euros in your pocket. Cubans are very happy to be paid in euros. This will only get worse as the Cuban peso rapidly depreciates in value due to inflation.