I know Cuba isn’t the most economically stable country, but i’m curious as to what could’ve happened to cause such a harsh and sudden drop
In: Economics
Part of it was the economic impact of COVID – every economy suffered, but the Cuban economy especially suffered due to other economic issues. Part of it was increased economic sanctions.
But the biggest problem is that Cuba was boardering on hyperinflation at that point. Official government estimates put the inflation rate at 70%, but many economists said that was distorted and the actual inflation rate was closer to 300-500%. When the government fires up the currency printer to pay its debts, inflation is inevitable – and when your currency value is in free fall, you have to expect international currency markets to react.
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