Cuba has launched a groundbreaking monetary reform initiative establishing three official exchange rate segments as part of a comprehensive strategy to address critical macroeconomic challenges. The Central Bank of Cuba confirmed the implementation of this multi-tier system designed to gradually converge toward a unified exchange rate while stimulating foreign currency earnings through exports.
The newly structured framework creates distinct segments with varying exchange mechanisms: Segment I maintains the current 1:24 rate for exporting entities; Segment II introduces a 1:120 rate for certain foreign income generators; while Segment III establishes a floating exchange rate for individuals and non-state management forms. This phased approach represents a significant departure from previous monetary policy and aims to create a legal, transparent exchange market accessible to both state and non-state actors.
According to Ian Pedro Carbonell Karell, Director of Macroeconomic Policy at the Central Bank of Cuba, these reforms address the country’s urgent need to organize foreign currency flows through formal banking channels. “These changes give legal access to foreign currency to many actors who did not have it until now and who resorted to the informal market,” Karell stated, emphasizing the measure’s role in combating speculation and volatility.
The reform specifically incentivizes export-oriented enterprises by allowing them to exchange retained foreign currency at Segment III’s more favorable floating rate, potentially increasing their Cuban peso earnings. This designed advantage aims to strengthen Cuba’s export sector—the nation’s primary foreign currency generator—while supporting essential population needs through central treasury revenues.
For non-state management entities, the reforms introduce unprecedented access to foreign currency for investment and restocking purposes, though purchasing power will be limited to 50% of average gross income reflected in fiscal accounts. The banking system will expand exchange services nationwide, with 41 branches currently operational and more planned as market consolidation progresses.
Authorities acknowledge that eliminating Cuba’s illegal currency market will require time and sustained implementation. The success of these measures ultimately depends on their ability to generate increased foreign currency liquidity and translate into tangible improvements in Cuban citizens’ quality of life amid prolonged economic challenges.