Emily Morris, honorary senior research fellow at University College London’s Institute of the Americas: “In mid-January, the informal exchange rate was 340 pesos per U.S. dollar. By mid-August, the rate had slid to 400 pesos per dollar: a 15 percent depreciation over the period. Exchange rates tend to move in line with relative prices. The exchange rate and inflation were hit by a currency reform in 2021 and have subsequently reflected shortages arising from a persistent lack of foreign exchange. Since mid-January, Cuba’s official prices index has risen by around 10 percent, but this understates the rise in the cost of consumer goods, so the fall in the Cuban peso’s value is unsurprising. However, exchange rates tend to be more volatile than prices, and this is certainly the case in Cuba, where the peso’s value reflects short-term fluctuations in demand and supply of foreign currency, as well as expectations. For example, the temporary appreciation of the peso (to 300 pesos per dollar) in December can be attributed to increased…”