In Cuba, the great urgency for foreign currency made the dictatorship, once again, have to put a stop to its dogmatic and failed socialist principles, to overcome the problems of the real world. It is neither the first nor the last time he does it. Cuban history, since the communist nightmare began in 1959, is full of economic contradictions, especially in times of great need. As happened in the post-Soviet and pre-Chavista period, when they had to release the dollar in the face of the inevitability of collapse, now Miguel Díaz-Canel had to recognize the real value of the US currency after the total failure generated by his exchange control with the exchange rate. artificial fixed.
In the midst of energy shortages, and with power cuts scheduled and previously reported by the state company that poorly supplies the population, the Cuban dictatorship desperately needs all the dollars it can get. In the style of the assassin Fidel Castro, who justified all Cuban ills with capitalism, the communist regime of his brother and nephew does the same with the same variables, but changing “imperialism” with the “blockade, war and pandemic ”. This week, so that the dollars enter the official channels, the authorities decided to nullify the exchange rate that they had artificially fixed, to recognize the value of the “capitalist” black market of the streets of Havana, eluding state regulations. of the bureaucracy.
And the jump in the exchange rate, which many might call “devaluation”, was not small. Of the 24 Cuban pesos that marked the formal blackboards, the State is now willing to deliver the 120. That is, the current value of the dollar in Cuba. What we could technically call “the price”. It is that, when the value is fixed artificially, it is not a “price”. It is an administrative resolution that generates surpluses or shortages, when it is located above or below the real market price.
“We have considered that the exchange rate of 120 Cuban pesos for the dollar, which is the currency that is taken as a base to later establish the exchange rate with the rest of the currencies, is the rate that we consider will have more expectation,” said the head of the Central Bank of Cuba without turning red. And yes, while the street offered 120… who was going to sell to the regime for 24?
Despite the delusional exchange control, which generated the logical and predictable “dollar black market”, the island’s monetary monopoly has made it clear in recent years that it has learned an important lesson: the inevitability of the law of supply and demand for the pesos they issue. Now, if they see that 120 dollars begin to arrive and they dedicate themselves to turning on the printers to attract more foreign currency… reality is going to harshly remind them of the most basic economics lessons.