In crisis, Cubans react to 6,900% inflation in the currency market

Cubans reacted on Thursday with pain and disbelief to the announcement that inflation in the last 10 months was 60% in retail prices and up to 6,900% in the informal currency market, amid a severe shortage of food and medicine .

“I was educated, I grew up in this system, but I never imagined that we would suffer. I feel pain for several reasons, like never before,” teacher Elda Marina Quiñónez, 69, told AFP as she left a market with onions and spices.

Currencies are exchanged for higher prices each day that passes in the informal market. Many essential items are only sold in foreign currency stores, which not everyone has access to. Thus, resellers sometimes offer the end consumer products at a price three or four times higher than in these already expensive stores.

This price increase is the product of “invention” and “speculation”, he said. Dolphin Lima, 65, a publishing industry worker, as he walked down a shopping street in Old Havana. “It never crossed my mind that this inflation would occur,” he lamented, uncomfortable because he believed that it was “traders” who caused it.

Cuba is experiencing a deep economic crisis, with a 13% GDP contraction from January 2020 to September 2021 due to the effects of the pandemic and economic sanctions imposed by the United States.

President Miguel Díaz Canel declared this Thursday, at the end of the ordinary period of the National Assembly of Popular Power, that the financial reform implemented on January 1 was “a unavoidable step” to increase business efficiency, but acknowledged that it it had “undesirable effects on the lives of citizens, which today are expressed, above all, in harmful inflation”.

The financial reform resulted in an average salary increase of 450%, but also in higher prices and services. The minimum wage was set at 87 dollars a month.

The head of the government commission charged with implementing the reform, Marino Murillo, announced yesterday that retail price inflation was 60%. But that number “does not correspond to what people are living, which are prices seven, 10 times higher,” he noted. “When added the levels of the informal market (of foreign currencies), inflation would be much higher”, of 6,900%, he pointed out.