Cuba Admits It Does Not Know Where Its Market Reforms Will Lead
Key Facts
This story is part of our coverage of the Cuba US tensions. Who backs Havana, the blackouts, the embargo vote and what it means for travellers are in our dossier.
Cuba is attempting its broadest economic opening in decades after six years of shrinking output. A senior official now admits the government does not know where the reforms will lead.
“We have to do something,” said Deputy Foreign Minister Carlos Fernández de Cossío, admitting officials do not know the outcome. Speaking to Breaking Points, he said change was deeper than at any time since the 1960s, CiberCuba reported.
Why This Matters
The package of 176 measures, unveiled in June 2026, is Cuba’s largest economic reform in decades, regional outlet NODAL reported. It lets foreign capital invest directly in private firms and cooperatives for the first time and allows private exchange houses.
Small private companies can now import and export without going through state intermediaries. The Central Bank set out plans this week to admit private and foreign capital into banking, CiberCuba reported.
Cuba’s first private exchange house has opened in Santa Clara as a pilot, Diario de Cuba reported. The reforms follow six years of economic contraction, according to NODAL.
What Fernández de Cossío Said
Fernández de Cossío is a deputy foreign minister who often speaks to US audiences, and Breaking Points is a US political programme. “We have understood that a better moment won’t arrive, we have to do it now,” he said, CiberCuba reported.
He called the reforms “a dramatic change in Cuba” and described a movement “toward the market”. “These are transformations we are doing for the Cuban people, to improve Cuba,” he added.
CiberCuba noted that similar changes have been discussed for about 15 years. The Communist Party approved its first market-oriented “Guidelines for Economic and Social Policy” at its 2011 congress.
What the 176 Measures Change
The National Assembly approved the package on 26 June 2026 after Prime Minister Manuel Marrero presented it, NODAL reported. The measures are grouped into 23 areas and were backed by the ruling Communist Party.
Foreign capital may now enter fuel trading and technology sectors such as data centres and mobile networks. State enterprises may design their own pay systems and keep more of their profits.
Municipal governments may retain foreign currency and manage projects funded by Cubans living abroad. On 16 September, Central Bank vice-president Alberto Javier Quiñones Betancourt said new banks would need a licence and face supervision.
He also announced a bank for farm lending, wider consumer credit and a new platform for auctioning foreign currency, CiberCuba reported. Central Bank director Ian Pedro Carbonell Karell said the Santa Clara house records real, settled trades, unlike social media rates.
Life on a Falling Peso
On 16 September, the Central Bank issued 10,000- and 20,000-peso notes to ease cash shortages, EFE reported. Cuba runs several official exchange rates, including a fixed rate of 120 pesos per dollar and a floating rate.
At the fixed rate, the notes are worth about US$83 and US$167, against about US$14 and US$29 at 700. The informal rate tracked by elTOQUE, an independent outlet, stood at 700 pesos per dollar on 16 September.
On 17 September, the Central Bank’s floating rate was 664 pesos per dollar, against 703 informally, CiberCuba reported. EFE cited a monthly pension of 3,000 pesos, worth US$25 at the fixed rate and about US$4 informally.
“A carton of eggs will still eat up almost the whole pension,” a 60-year-old Havana resident told EFE. Annual inflation stood at 25.19% in August, La Silla Rota reported.
How Cuba Got Here
The squeeze began with a 1 January 2021 currency reform that abolished the convertible peso and set 24 pesos per dollar. The state could not supply dollars at that rate, and the informal market has driven the gap wider ever since.
Output fell 11% in 2020, the worst drop in nearly 30 years, and shrank again by 1.1% in 2024. Private small and medium firms with up to 100 employees have been allowed since August 2021.
Energy is the most visible failure, and a breakdown at the Antonio Guiteras plant caused a nationwide blackout on 18 October 2024. Pressure from Washington has grown, and the Trump administration put Cuba back on the terrorism sponsor list in January 2025.
In January 2026, the White House declared a national emergency and authorised tariffs on countries supplying Cuba with oil. Venezuela, long Cuba’s main oil supplier, then halted shipments to the island.
Reactions and the Other Side
Communists, youth leaders and intellectuals close to the government have questioned the reforms, CiberCuba reported. Some call them a step toward “pure and hard capitalism” and warn that inequality will grow.
Residents interviewed by EFE in Havana focused instead on prices and the shortage of cash. “I need cash because many private businesses don’t accept card transfers,” a 75-year-old told the agency.
Central Bank president Juana Lilia Delgado Portal said the new notes adjust paper money to the economy’s situation, particularly prices. They follow 2,000- and 5,000-peso bills issued in March, worth about US$3 and US$7 at the informal rate.
What It Means If You Invest, Travel or Send Money
For foreign investors, stakes in private firms, cooperatives and banks are now possible, but each bank needs a Central Bank licence. US investors remain bound by the embargo, so the opening mainly concerns firms from Europe, Latin America and elsewhere.
For travellers, the gap between official and informal rates means prices can vary widely depending on how visitors pay. Card payments are not accepted everywhere, and cash shortages have been severe enough to require the new notes.
For Cubans abroad, the right of municipalities to manage diaspora-funded projects creates a new channel for family and community money. For Cubans at home, the test is whether the Santa Clara pilot’s rate narrows the gap with the informal market.
What Is Not Yet Known
It is not known how quickly the measures will reach ordinary Cubans, who are paid in pesos. The Central Bank says the Santa Clara pilot will inform the official rate for private buyers, Diario de Cuba reported.
No date has been announced for a new rate based on that data. It is also unclear how leaders will answer party critics who call the plan “pure and hard capitalism”, as CiberCuba reported.
The Central Bank has not said how many licences it will grant to new banks, or when the first will open. It is also unclear whether talks with Washington over fuel supplies, confirmed by Havana earlier this year, will ease the energy shortage.
The big picture: Cuba explained — economy, politics, society and daily life in one read.
Frequently Asked Questions
Why do Cuba’s reforms matter?
Cuba is opening its economy to private and foreign capital on a scale not seen since the 1960s, officials say. The outcome will shape living standards, migration and foreign investment on the island.
What are Cuba’s 2026 economic reforms?
A package of 176 measures unveiled in June 2026 opens private firms to foreign capital and allows private exchange houses. Small businesses can also trade abroad directly.
How much is the Cuban peso worth?
The informal rate tracked by elTOQUE reached 700 pesos per dollar on 16 September 2026. Official rates range from a fixed 120 to a floating rate near 664.
Can Americans invest under the new rules?
The US embargo still restricts American investment and trade with Cuba. The new rules mainly open doors to investors from other countries.
Sources: CiberCuba, uncertainty in Havana over the reforms, NODAL, National Assembly approves 176 measures, Infobae/EFE, new 10,000- and 20,000-peso notes, Diario de Cuba, first private exchange house, CiberCuba, informal and official dollar rates on 18 September, CiberCuba, Central Bank opens banking to private and foreign capital, La Silla Rota, new notes and inflation, Wikipedia, Economy of Cuba, Wikipedia, 2024 Cuba blackouts, Wikipedia, Cuba–United States relations
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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