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Currencies

The Cuban Informal Market: A Tale of Fluctuating Currencies

2024-11-18

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.

In Dubai, United Arab Emirates, on November 18th, 2024, through Chainwire, Bybit, renowned as the world's second-largest cryptocurrency exchange by trading volume, is excited to announce that this year's Black Friday and Cyber Monday are arriving early for Bybit Card holders, accompanied by extra perks. From the present moment until December 2nd, both new and existing Bybit Card users can unlock rewards during their annual shopping spree.

Exclusive Sign-Up Offer

For those who have yet to experience the Bybit Card, now is the time to join the club and enjoy a seamless crypto off-ramp with every swipe. New Bybit users can:- Register for the event.- Apply for the Bybit Card and make a first deposit of at least 100 USDT.- Spend at least $100 with the Bybit Card to receive a 20 USDT airdrop.Existing Bybit users can:- Register for the event.- Apply for the Bybit Card.- Spend at least $100 with the Bybit Card to receive a 5 USDT airdrop.The event period is from November 15th, 2024, at 12 PM UTC to December 2nd, 2024, at 11:59 PM UTC.

Black Friday Weekend Bonus

Bybit Card holders have the opportunity to earn an additional 5% cashback on eligible purchases made during the Black Friday weekend. Depending on their cardholder tier, users may receive a total of up to 15% cashback during the promotional period.The event period for this bonus is from November 29th, 2024, at 12 AM UTC to December 2nd, 2024, at 11:59 PM UTC.Bybit's Card aligns with its mission to expand access to crypto payments and enhance the utility of digital assets. By simplifying the process of holding and spending cryptocurrency, the card offers users a practical tool for engaging with the digital economy.As Sales and Marketing Director Joan Han at Bybit said, "For millions around the world, Black Friday and Cyber Monday are all about gifting their loved ones and treating themselves. Celebrating the peak shopping season will be exceptionally rewarding this year with the Bybit Card, and we will continue to provide benefits throughout the year."The Bybit Card is widely used by Bybit users worldwide due to its convenience and global accessibility. Accepted at over 90 million merchants through the Mastercard network, it allows crypto holders to seamlessly use their digital assets for daily purchases, transforming crypto holdings into a convenient and everyday payment option. By bridging digital assets with daily transactions, the Bybit Card provides a straightforward solution for integrating cryptocurrency into routine spending.Users can find more information about Bybit's answer to everyday crypto spending on eligibility at Bybit Card.#Bybit / #TheCryptoArkAbout BybitBybit is the world's second-largest cryptocurrency exchange by trading volume, serving over 50 million users. Established in 2018, Bybit provides a professional platform where crypto investors and traders can access an ultra-fast matching engine, 24/7 customer service, and multilingual community support. Bybit is a proud partner of Formula One's reigning Constructors' and Drivers' champions, the Oracle Red Bull Racing team.For more details about Bybit, please visit Bybit Press.For media inquiries, please contact: media@bybit.com.For more information, please visit: https://www.bybit.com.For updates, please follow: Bybit's Communities and Social Media.ContactHead of PR Tony AuBybit tony.au@bybit.com

The dollar's consolidation took an unexpected turn late in the afternoon of Monday November 18. Despite the rise in US Treasuries yields to 4.45%, the market dynamics were far from straightforward. The US '10-year' bond deteriorated to 4.493%, and the '30-year' reached over 4.676%. However, a slight upturn began to influence the greenback, which saw a decline of -0.35% to 106.30 ('$-Index') and nearly 0.5% against the euro, moving from 1.0535 to 1.0593 around 1:30 p.m. (equivalent to -0.15%).

The Dollar's Battle Against Major Currencies

The dollar showed resilience against the yen, gaining 0.25%, which was enough to counterbalance its -0.4% drop against the Swiss franc and sterling. It's interesting to note the strong advance of the Australian dollar, which increased by 0.7% against the greenback and 0.2% against the euro. Additionally, the Canadian dollar made a recovery, rising by 0.55% to 1.400.

The Yuan's Neglected Performance

On Monday, the Yuan was the least noticed currency, experiencing a -1.1% decline against the euro, reaching 7.666. This corrects the Renminbi's +1.2% gain since last Wednesday. The market dynamics for the Yuan were relatively subdued during this period.

Market Themes and Investor Concerns

The themes that have been occupying the markets are now well-known. On one hand, there is the effect of Trump's election, along with weak demand from China and diverse corporate comments on the third quarter. Investors are worried that the 'pro-business' yet protectionist approach towards China may lead to a resurgence of inflation. This could potentially cause the Fed to slow down its rate cuts or even refrain from cutting them at all on December 17/18. Currently, it's a situation with a 50/50 chance.

The Support for the Pound

Finally, the pound is receiving support from British 'Gilts', whose yield has risen by +4.5 basis points to 4.518%. This indicates a certain level of stability and confidence in the pound's performance.Overall, the week ahead is expected to be relatively quiet, with few major indicators on the agenda. The main event will be the publication of the 'flash' European PMI indices on Friday. These indices will provide valuable insights into the economic health of the Eurozone and could potentially impact the currency markets further.Copyright (c) 2024 CercleFinance.com. All rights reserved.