Cubans resent rigor of inflation of 6,900% in informal foreign exchange market

The cubans reacted this Thursday with “pain” and “disbelief” to the announcement by the authorities that the inflation In the last 10 months, it stood at 60% for retail prices and up to 6,900% in the informal foreign exchange market, amid a severe shortage of food and medicine.

“I was educated, I grew up in this system and yet I never imagined that we were going to suffer because I feel suffering, I feel pain for many reasons, but never like this,” said Elda Marina Quiñónez, a 69-year-old teacher, upon leaving a market with some onions and herbs to season a pot of beans.

President Miguel Díaz Canel affirmed, at the close of the ordinary period of the National Assembly of People’s Power, that the financial reform applied on January 1, was “an urgent step” to increase business efficiency, but admitted that it has had “effects unwanted on the lives of citizens that today is expressed above all in the harmful inflation “.

This financial reform implied an average salary increase of 450%, but also a rise in prices and services. The minimum salary was established at 2,100 pesos per month (US $ 87).

The head of the government commission in charge of implementing this reform, Marino Murillo, announced on Wednesday that inflation in retail prices was 60%.

But that figure “does not match what people are living. People are living prices seven, ten times higher, ”said Murillo.

“When I added the levels of the informal (foreign exchange) market, inflation would be much higher”, 6,900%, he said.

Currencies are exchanged at a higher price every day on the black market. Many of the products necessary for the daily life of Cubans are only sold in foreign currency stores, to which not everyone has access.

In this way, resellers sometimes offer the last consumer products three or four times more expensive than what they cost in these already expensive stores.

This price hike is the product of “invention” and “speculation,” said Delfín Lima, a 65-year-old publishing industry worker, as he walks through Obispo, a busy commercial street in Old Havana.

“It never crossed my mind that this inflation was going to occur,” he said, annoyed because he believes that the “merchants” are the ones who caused it.

Cuba is suffering a deep economic crisis, with a 13% GDP contraction from January 2020 to September 2021 due to the effects of the COVID-19 pandemic and for more than 60 years of a communist dictatorship that destroyed the country’s economy and it impoverished its entire population.