Cuban peso in free fall against the dollar

[El Presidente]

 

Cuban peso in free fall against the dollar

By Syndicated ContentJan 26, 2022 | 7:06 AM

By Marc Frank

HAVANA (Reuters) – The Cuban peso was trading at nearly 100 to the dollar on the informal market Tuesday, according to a trader and online trackers, a depreciation of more than 30% in less than a month and four times the fixed official rate.

CONTINUED

[Corylax18]

Unchanged today. I just booked a trip for March 7th-15th. Who knows what things will be like in 5 1/2 weeks. 

[Monocle]

2 hours ago, Corylax18 said:

Unchanged today. I just booked a trip for March 7th-15th. Who knows what things will be like in 5 1/2 weeks. 

I’m booking for then as well. Fingers crossed Omicron has died down there by then.

[NSXCIGAR]

They need to adjust the exchange rate soon or tourism is going to evaporate. The price of a hotel room is going to be €500 a night for a tourist checking prices (I'm assuming not all hotels are priced in MLC).

Would it be safe to say that probably half of tourists don't know or aren't comfortable changing pesos on the black market? Even a third of prospective tourists thinking those are the prices they'd have to pay would be an enormous deterrent to going.

[dominattorney]

4 minutes ago, NSXCIGAR said:

 

Would it be safe to say that probably half of tourists don't know or aren't comfortable changing pesos on the black market? Even a third of prospective tourists thinking those are the prices they'd have to pay would be an enormous blow. 

I only recently came to understand this. 

[Corylax18]

1 hour ago, NSXCIGAR said:

They need to adjust the exchange rate soon or tourism is going to evaporate. The price of a hotel room is going to be €500 a night for a tourist checking prices (I'm assuming not all hotels are priced in MLC).

Would it be safe to say that probably half of tourists don't know or aren't comfortable changing pesos on the black market? Even a third of prospective tourists thinking those are the prices they'd have to pay would be an enormous blow. 

I would say closer to 90% aren't even aware black market currency exchanges are a thing. Most tourism to Cuba has historically been Cruise ships and All Inclusives, there really isnt any need to deal with local currency for most of those tourists. Its part of the charm I guess. 

I still dont understand why a Canadian would pick a Cuban all inclusive verse something in Mexico. I totally understand the safety thing, but you get so much more for your money. 

 

55 minutes ago, dominattorney said:

I only recently came to understand this. 

I wouldn't go if it wasn't for this. It doesn't make sense as a tourist or cigar shopping destination otherwise. 

[NSXCIGAR]

1 minute ago, Corylax18 said:

I still dont understand why a Canadian would pick a Cuban all inclusive verse something in Mexico

I've been wondering that for years. Outside of cigars of course there are about 20 places in the Caribbean I would choose over Cuba in terms of experience and facilities.

Sure, Havana is cool to see once. But if you're doing the resort thing I just don't get it. 

[Bijan]

4 hours ago, Corylax18 said:

I still dont understand why a Canadian would pick a Cuban all inclusive verse something in Mexico. I totally understand the safety thing, but you get so much more for your money. 

Safety sure. But until recently Cuba was literally the cheapest all inclusive destination from Canada. Of course you get what you pay for...

 

4 hours ago, NSXCIGAR said:

I've been wondering that for years. Outside of cigars of course there are about 20 places in the Caribbean I would choose over Cuba in terms of experience and facilities.

Sure, Havana is cool to see once. But if you're doing the resort thing I just don't get it. 

A lot of the Canadians won't leave the resort or will leave the resort for a single day. Just lounging and drinking, and eating the somewhat edible all you can eat food.

[NSXCIGAR]

11 minutes ago, Bijan said:

A lot of the Canadians won't leave the resort or will leave the resort for a single day. Just lounging and drinking, and eating the somewhat edible all you can eat food.

Right, so notwithstanding cigars, any Caribbean resort would be identical (except the food may be significantly more edible), no?

[Bijan]

11 minutes ago, NSXCIGAR said:

Right, so notwithstanding cigars, any Caribbean resort would be identical (except the food may be significantly more edible), no?

Correct. They were mainly competing on price and the beaches are very nice.

If you want better food the most expensive Cuban resorts are actually quite passable but no longer a good deal price wise.

But right now you can get 7 days 4 star (Cuban 4 star mind you) for $660 Canadian ($500us). I think in the $700s (Canadian) for 5 star (again Cuban so like 3 star elsewhere probably).

[Ryan]

Nice to see Reuters picked up on my observation! There are bits they left out though.

I was talking to a Cuban friend at length yesterday. Many here have met him and a clued-in guy, extremely intelligent, well connected (or was), speaks four languages and works hard and smart. He'd be out of there tomorrow if he could afford to bring his two kids with him.

He worked for himself until two years ago in the tourist industry in Cuba and was in the top1% of Cuban income level until the quadruple whammy hit of

Pandemic

"Tarea Ordenamente" (introducing MLC stores, dropping the cuc etc.)

Worsening sanctions

Cuba explicitly banning his employment as a private tour guide.

Now he's on the skids and it's terrible. Anyway, what he told me is his estimate of people who have left Cuba one-way in the last 8 months. 250,000 or 2% of the population.

JohnnyO had mentioned that that is what he believes to be causing the current inflation in the USD in Cuba (since the start of the year), that is, the requirement for hard currency to leave the country. At those numbers, that makes sense.

2% might not sound like much but those 250,000 won't be retired people or many children. It'll be 18-40 years old willing to risk everything (up to their lives) because they want to work. The very demographic that needs to stay in a country to have some chance of turning the economy around.

Something similar happened Ireland in the 1950s. The population here dropped 10% in that decade. Everyone 15-30 who wanted to work, left to go to England, US etc., (those who didn't inherit a farm or become a priest). It took Ireland 45 years to recover.       

 

16 hours ago, NSXCIGAR said:

They need to adjust the exchange rate soon or tourism is going to evaporate. The price of a hotel room is going to be €500 a night for a tourist checking prices (I'm assuming not all hotels are priced in MLC).

Would it be safe to say that probably half of tourists don't know or aren't comfortable changing pesos on the black market? Even a third of prospective tourists thinking those are the prices they'd have to pay would be an enormous deterrent to going.

Hotels still charge in USD for bookings and the prices have not changed that much. Oddly enough, services in hotels have got cheaper for tourists as many charge in cup for food, drinks and souvenirs. Thus the $12 Hotel Nacional ashtrays, down from $50 two years ago, for those tourists who change their money unofficially.

I am hearing that more hotels are now requiring credit card payment for even a cup of coffee, to get around this. Not sure about the Hotel Nacional and their ashtrays. Though I can confirm that they were priced CUP in November as that's what I was charged.

[NSXCIGAR]

6 hours ago, Ryan said:

Though I can confirm that they were priced CUP in November as that's what I was charged.

That's the irony. It's actually cheaper for those in the know willing to change CUP unofficially but outrageously expensive for those who don't, which as the estimates here point out are between 50-90% of the tourists. 

Again, those in the insulated world of the resort don't care but anyone venturing out will be in for a shock. Dealing in CUP is still unavoidable at this point and I can't imagine anyone not falling out of their chair at $80 taxi rides or $40 sandwiches. It's going to turn Havana into an economic wasteland. 

[Corylax18]

2 minutes ago, NSXCIGAR said:

That's the irony. It's actually cheaper for those in the know willing to change CUP unofficially but outrageously expensive for those who don't, which as the estimates here point out are between 50-90% of the tourists. 

Again, those in the insulated world of the resort don't care but anyone venturing out will be in for a shock. Dealing in CUP is still unavoidable at this point and I can't imagine anyone not falling out of their chair at $80 taxi rides or $40 sandwiches. It's going to turn Havana into an economic wasteland. 

I'm looking for a bag man for my trip in March. 😁 I dont want to carry around 250,000 or 300,000 CUP, simply for the weight of it. It was already an interesting experience changing cash, now we would need suitcases to move the kind of currency that used to be changed regularly. 

[...]

1 hour ago, Corylax18 said:

I'm looking for a bag man for my trip in March. 😁 I dont want to carry around 250,000 or 300,000 CUP, simply for the weight of it. It was already an interesting experience changing cash, now we would need suitcases to move the kind of currency that used to be changed regularly. 

As one may seemingly be materially incapable of buying cigars or rum using CUP, changing that amount of cash might be irrelevant to most... 

[Corylax18]

6 minutes ago, Jeanff said:

As one may seemingly be materially incapable of buying cigars or rum using CUP, changing that amount of cash might be irrelevant to most... 

I still need to eat/drink and pay for a place to sleep. I imagine I'll end up paying for things with three "currencies" during the trip. Straight USD, CUP, and MLC. I really don't know what the mix is going to be like though. In years past, plenty of people preferred being paid in USD, it saved them the exchange. I really dont know what to expect this time around. Things will certainly continue evolving between now and then anyway. 

[NSXCIGAR]

1 hour ago, Corylax18 said:

I'm looking for a bag man for my trip in March. 😁 I dont want to carry around 250,000 or 300,000 CUP, simply for the weight of it. It was already an interesting experience changing cash, now we would need suitcases to move the kind of currency that used to be changed regularly. 

Doesn't really matter since you have to bring the EUR anyway on your person. A backpack should be sufficient to carry the CUP. And thank goodness crime is low/nonexistent in Cuba. 

Shades of Weimar Germany...

[Corylax18]

57 minutes ago, NSXCIGAR said:

Doesn't really matter since you have to bring the EUR anyway on your person.

I do?!?!

58 minutes ago, NSXCIGAR said:

A backpack should be sufficient to carry the CUP. And thank goodness crime is low/nonexistent in Cuba.

Agreed, I wouldn't do anything like this anywhere else anywhere else I've been. 

[Ryan]

You won't need a back pack for cash.

200,000 pesos, enough for 2 weeks, is the size of a brick (but the weight of a brick-sized paperback book), in the various denominations, the largest being 1,000 cup. But you'll get quite a few 100s and 200s from whoever you change it with.

What you need to bring out with you on a day/night depends where you go, who you're with and how long you stay out. On average, a beer costs 250, mojito 250, a cocktail with decent booze 400, a pizza(Espacios) 400, decent 3 hour dinner with drinks and wine, 3,000 a head. A bottle of aged rum, cokes and ice, 2,000 - 5,000 depending on the place. As usual bring out 2 or 3 times what you think you'll need. 

For example, if you think you're going to have a 15,000 peso night (drinks and light food for 4 people for 4-10 hours) bring 35,000 pesos with you. 35,000 pesos is the size and weight of a three finger cigar case, give or take, depending on the denominations you have.

Do bring a few hundred in USD in small bills, 5s, 10s, 20s and have some on you. They can be handy.

[El Presidente]

5 minutes ago, Ryan said:

You won't need a back pack for cash.

200,000 pesos, enough for 2 weeks, is the size of a brick (but the weight of a brick-sized paperback book), in the various denominations, the largest being 1,000 cup. But you'll get quite a few 100s and 200s from whoever you change it with.

What you need to bring out with you on a day/night depends where you go, who you're with and how long you stay out. On average, a beer costs 250, mojito 250, a cocktail with decent booze 400, a pizza(Espacios) 400, decent 3 hour dinner with drinks and wine, 3,000 a head. A bottle of aged rum, cokes and ice, 2,000 - 5,000 depending on the place. As usual bring out 2 or 3 times what you think you'll need. 

For example, if you think you're going to have a 15,000 peso night (drinks and light food for 4 people for 4-10 hours) bring 35,000 pesos with you. 35,000 pesos is the size and weight of a three finger cigar case, give or take, depending on the denominations you have.

Do bring a few hundred in USD in small bills, 5s, 10s, 20s and have some on you. They can be handy.

 

in summary.....just bring the entire backpack 

[Corylax18]

1 hour ago, El Presidente said:

 

in summary.....just bring the entire backpack 

He didn't even mention Cigars. I'm gunna need 2 bags. 😆

 

1 hour ago, Ryan said:

You won't need a back pack for cash.

200,000 pesos, enough for 2 weeks, is the size of a brick (but the weight of a brick-sized paperback book), in the various denominations, the largest being 1,000 cup. But you'll get quite a few 100s and 200s from whoever you change it with.

What you need to bring out with you on a day/night depends where you go, who you're with and how long you stay out. On average, a beer costs 250, mojito 250, a cocktail with decent booze 400, a pizza(Espacios) 400, decent 3 hour dinner with drinks and wine, 3,000 a head. A bottle of aged rum, cokes and ice, 2,000 - 5,000 depending on the place. As usual bring out 2 or 3 times what you think you'll need. 

For example, if you think you're going to have a 15,000 peso night (drinks and light food for 4 people for 4-10 hours) bring 35,000 pesos with you. 35,000 pesos is the size and weight of a three finger cigar case, give or take, depending on the denominations you have.

Do bring a few hundred in USD in small bills, 5s, 10s, 20s and have some on you. They can be handy.

Thanks Andy. I appreciate the info. I will definitely be spending some time at Espacios. I didn't realize they had 1,000 CUP notes, that definitely makes things easier than just 100s. The 'double what you need" rule has always been a good one. 

I have heard some conflicting reports on LCDHs, most are saying only MLC is accepted. Some are saying cash for custom, but MLC for Habanos Cigars, others are saying cash across the board. What was your experience? 

[NSXCIGAR]

3 hours ago, Corylax18 said:

I do?!?!

I suppose you could buy MLC with your credit card and sell that for CUP but aside from exchanging EUR that's the only way. 

As far as in the LCDHs I'm sure Andy can elaborate but they all appear to accept your non-US issued bank card. I don't know if Andy dealt with MLC or the cards but they probably accept those as well. 

[Ryan]

12 hours ago, Corylax18 said:

He didn't even mention Cigars. I'm gunna need 2 bags. 😆

 

Thanks Andy. I appreciate the info. I will definitely be spending some time at Espacios. I didn't realize they had 1,000 CUP notes, that definitely makes things easier than just 100s. The 'double what you need" rule has always been a good one. 

I have heard some conflicting reports on LCDHs, most are saying only MLC is accepted. Some are saying cash for custom, but MLC for Habanos Cigars, others are saying cash across the board. What was your experience? 

I bought custom rolls in the Melia Habana and the Comodoro, I used my credit card for everything. I was told only credit card only, no cash for anything including custom rolls.

The cigar stores have all prices, for cigars rum and coffee, in USD but they cannot accept USD cash or US credit cards, that's the difficulty. That might change (accepting USD cash) later this year but probably not by March. Things change nearly weekly in Havana. 

In the Comodoro I saw a Cuban person use their MLC card to buy coffee.

 

10 hours ago, NSXCIGAR said:

I suppose you could buy MLC with your credit card and sell that for CUP but aside from exchanging EUR that's the only way. 

As far as in the LCDHs I'm sure Andy can elaborate but they all appear to accept your non-US issued bank card. I don't know if Andy dealt with MLC or the cards but they probably accept those as well. 

I was going to buy a MLC card, really out of interest, but when I brought it up with friends I was laughed at a couple of times with something like "why do that? You have a euro credit card, you don't need one.", so I didn't bother chasing it up. There are ways for tourists to buy MLC cards, though I haven't done it so I can't really comment.

I do know that you can transfer funds to a Cuban friend's MLC card though. A Cuban sim card and data will help with that. Any Cuban friend with a MLC card will know how to transfer funds to it. Then it becomes possible to have a Cuban friend buy cigars for you. This won't matter for the factura, shop staff will fill that out with details from whatever passport you give them.

Regarding costs and currencies and sizes. Following is the receipt for dinner for seven in Restaurante Yarini (I'd recommned it). Two bottles of wine, cocktails and some imported liqueurs. Then the lump of cash required, that's just over 20,000 pesos.

[Ryan]

Watch your bill in Cuba now, even more than before. Take a picture with your phone of every food receipt you get. 

I had 20 pizzas added to my bill one night in Espacios. 8000 cup extra  (over 100 USD at the time). The waitress started crying when I told her, I knew her quite well. She hadn't done it, in Espacios waitresses don't always see bill amounts after the cashier gives it to them. I had a chat with the manager just to let him know that it's not the kind of service that will attract tourists when they come back. 

Just a heads up.

Plus a sample of Espacios drinks prices. Cubata7 is a Cubata with Havana Club 7 year old. $3 is a good price for that now.

 

[Corylax18]

16 hours ago, NSXCIGAR said:

I suppose you could buy MLC with your credit card and sell that for CUP but aside from exchanging EUR that's the only way. 

As far as in the LCDHs I'm sure Andy can elaborate but they all appear to accept your non-US issued bank card. I don't know if Andy dealt with MLC or the cards but they probably accept those as well. 

Ah, now I understand what you meant. I'm hoping to avoid getting an MLC at all, like Andy said, I don't know if it really makes sense for me to get one my self.

 

 

5 hours ago, Ryan said:

do know that you can transfer funds to a Cuban friend's MLC card though. A Cuban sim card and data will help with that. Any Cuban friend with a MLC card will know how to transfer funds to it. Then it becomes possible to have a Cuban friend buy cigars for you. This won't matter for the factura, shop staff will fill that out with details from whatever passport you give them.

Thanks for posting all of this Andy. Its super helpful! I've watched through your Video with Rob a couple times already. I'm trying to work through the details of making this work now. The changes would have to be pretty significant for any of my cards to start working. 

I love those Pizzas at Espacios, but I don't think I could eat 22 of them over a whole trip. 😄

Thanks for the tips on receipts. Its always been a good idea down there, but all the extra #'s (and HC 7 Cubatas at $3) make it even easier to sneak something in than ever. Its hard to get all that upset about it, but its definitely better to catch it if you can. 

[madandana]

2 minutes ago, Corylax18 said:

Thanks for posting all of this Andy. Its super helpful! I've watched through your Video with Rob a couple times already. I'm trying to work through the details of making this work now. The changes would have to be pretty significant for any of my cards to start working. 

I love those Pizzas at Espacios, but I don't think I could eat 22 of them over a whole trip. 😄

Thanks for the tips on receipts. Its always been a good idea down there, but all the extra # (and HC 7 Cubatas at $3) make it even easier to sneak something in than ever. Its hard to get all that upset about it, but its definitely better to catch it if you can. 

Can’t wait to read your trip report Cory