In recent days, there has been an intense debate in Cuba related to an information service offered by the "independent" media outlet elTOQUE. It involves the daily, or more than daily real-time, publication of the US dollar's value on the Cuban informal market. In truth, to begin with, this informal market ends up being the market, because the so-called official Exchange Houses only sell a handful of dollars to the population through a ticket system, a (virtual) queue, in which, at a minimum, we can wait approximately a year until receiving notification to buy a maximum of 100 dollars. I, for example, am number 39,374 in a virtual queue that yesterday closed at position 20,848.
Thus, the informal market is the one that ends up providing the volumes people need to resolve certain urgencies, whether it's buying food and other necessities in state-owned stores that only sell in dollars, or simply to burn the depressed Cuban pesos to leverage their monetary assets into US currency. But it's not just about the immediate needs of common people; this informal market also meets the demand of many private entrepreneurs who import products like rice, sausages, chicken, ground meat, or cooking oil, which then end up in a formal/informal sales network for the population, obviously subjected to the fluctuations of the dollar's price. That is—and this next point is very serious—: it is an open secret that a good part of what has entered the country legally has been acquired with dollars bought in that murky market.
For all the above reasons, what elTOQUE does, and how it does it, invariably impacts the (under)development of the country's economy, which, in any case, has reached this unfathomable crisis due to the confluence of several factors. These latter could be summarized into two: the impact of US sanctions, which are the most comprehensive applied to any country, and terrible statecraft, especially over the last five years. But the outlet is, without any doubt, the main reference for the market's "health"; in this issue, they are our de facto Central Bank. When I myself buy my annual 100 dollars—and this is because I live in Havana; outside here the wait can exceed two years—, I usually resell them at the price indicated by the elTOQUE exchange rate that day.
Now, the first problem I have with elTOQUE is that it is a media outlet that provides services, as a vendor, to the US Government. It does this through two corporations based in Florida, the for-profit Mediaplus Experience and the not-for-profit Mas Voces Foundation. This is a problematic link considering US policy towards Cuba, which is directly oriented towards regime change in Cuba and is therefore a flagrant denial of the Island's sovereignty. However, there is no proof that, through elTOQUE, Washington is manipulating the exchange rate. I don't rule it out either, but the mere connection is, for me, a punishable fact.
Then there is the issue of the "methodology" used by the not-independent outlet, which boils down to finding "the median of the numbers written in buy/sell ads for foreign currency in social media groups and [online informal marketplaces]." This, as anyone can understand, is extremely vulnerable to manipulation, which is not to say it has been proven that elTOQUE is colluding with certain actors to actively manipulate this calculation mechanism to which they have appealed. Yet, certainly, this platform clearly would not be a factor if the country had the foreign currency to supply the market, at least for those who can produce (exportable) goods and services on-island. In this sense, Cuba is facing the need for a sound financial intervention that no ally or friend seems willing or able to conduct. The reasons why the latter is happening can be discussed in another long-form insight about my country.
This is all for today’s report.