The Central Bank of Cuba (BCC), in the person of its Minister-President, Juana Lilia Delgado Portal, announced this Wednesday, on national television, a transformation of its foreign exchange market, which will come into force from this 18th of December, under principles of gradualism and temporality.

In her appearance, Delgado Portal explained that the objective of this measure is to eliminate distortions caused by the current multiple exchange rates, recover the convertibility of the Cuban peso, strengthen monetary institutionalism and advance towards exchange rate convergence, avoiding a sharp devaluation of the national currency.

She also noted that the decision was taken according to account of the impact of external restrictions, the fall in foreign currency income and accumulated imbalances that are felt in the country’s daily life.

The Minister-President informed that the new structure of the foreign exchange market will consist of three segments: two fixed rates of 1X24 and 1X120 and the appearance of a third daily floating exchange rate which will be published on the institutional sites of the BCC according to the dynamics of supply and demand.

She highlighted that the preservation of the two fixed exchange rates seeks to protect the population in basic and sensitive operations, in a national effort to maintain certain stability in essential prices.

On the other hand, she clarified that the new floating rate aims to incentivise exporters and other foreign currency providers to sell at competitive prices, attracting foreign currency, reducing pressures from the informal market and taking steps for a gradual and responsible stabilisation with a view to the revaluation of the Cuban peso.

According to the explanation, the transformation of the foreign exchange market is integrated into a set of financial, commercial, tax and other measures, which encompass several simultaneous fronts with the objective of improving the efficiency of the economy in a general way.

Among the measures that will be implemented, the stabilisation and progressive strengthening of the so-called accounts in freely convertible currency (MLC) stands out, contrary to what, falsely, some have speculated or affirmed about their disappearance, in order to strengthen their purchasing power and use value.

As part of this projection, the operability of the bank accounts of non-state forms of management will be guaranteed, which will allow them to execute foreign currency transactions both internally and oriented towards foreign trade.

Likewise, the legal backing of the announced measures will be published in due course in the Official Gazette of the Republic.