¿MLC Is its days numbered? Experts advise getting rid of it MLC and save in dollars or other currencies

As the number of dollar stores increases throughout Cuba, distrust in the Freely Convertible Currency grows. MLC has its days numbered?

Confidence in freely convertible currency (MLC) continues to fall in Cuba, while warnings about its instability and uncertain future grow. According to the most recent report by the Observatory of Currencies and Finance (OMFi), directed by economist Pavel Vidal, more and more people on the island are looking for ways to get rid of their balances in MLC, and direct their savings toward stronger currencies, such as the dollar and the euro.

La MLC loses ground and usefulness in everyday life

During April, the OMFi detected up to ten alerts of instability in the informal market of the MLCIn the last three months, its performance has been six times more volatile than the dollar and three times more volatile than the euro. This distrust has grown in the face of fewer stores accepting MLC and the withdrawal of this currency from remittance agencies operating from the United States.

Although the final elimination of the MLCThe report emphasizes that its use has become residual and its acceptance is declining. The experts' advice is clear: minimize the use of this currency and opt for more stable currencies.

The dollar continues to rise, although with signs of slowdown

The dollar, like the euro, has maintained an upward trend, although with less intensity in May. The OMFi forecasts the greenback will close the month between 357 and 368 Cuban pesos, while the euro will be between 372 and 383. MLC, for its part, would move between 255 and 265 pesos, which reflects its loss of value and attractiveness.

However, an increase in the willingness to sell dollars on the informal market has been detected, which could temporarily slow the rise in prices.

Growing dollarization and social inequality

The partial dollarization of the economy, acknowledged by the government itself, has widened the gap between those with access to foreign currency and those who rely solely on the Cuban peso. The report warns that this trend raises prices in private businesses that import in foreign currency and sell in the national currency, which increases the cost of consumption and exacerbates inequality.

As an example, the average salary in Cuba (5.839 CUP) is equivalent to only $15,78 at the informal exchange rate. The minimum pension, $1.528 CUP, represents just $4,13. This situation leaves a large portion of the population without access to basic goods.

Business instability and postponement of measures

The report also highlights the difficulty of establishing a wholesale trade system between state-owned enterprises and MSMEs, given the segmentation of the Cuban economy. While some access foreign currency through centralized mechanisms, others depend on the informal market or their own foreign currency income.

Proof of this is the indefinite postponement of the regulation limiting wholesale trade to MSMEs and self-employed workers, as well as the extension of the deadline for liquidating goods until September. For OMFi, this represents official recognition of the complexity generated by a fragmented monetary system.

And the Cuban peso?

Although the peso has steadily lost value, Vidal does not recommend abandoning it completely. If control of the fiscal deficit is consolidated, the peso could recover.cupretain part of its value. In this scenario, keeping a proportion of savings in national currency may be a prudent strategy.

In conclusion, the economic outlook remains marked by uncertainty, growing dollarization, and a weak national currency. Experts suggest avoiding MLC, prioritize savings in dollars or euros and do not completely rule out the Cuban peso in the event of possible future changes.