From today the Central Bank of Cuba will purchase cash dollars at a greatly devalued rate of USD 1 / CUP 120, as opposed to the fixed official rate of CUP 24. The new rate will apparently float freely according to market sentiment against all convertible currencies, whereas the official rate will remain fixed against the US dollar.
The new rate will be available from all banks and private exchanges, including bureaux de change and hotels, in exchange for physical hard currencies. It outstrips the USD 1 / CUP 115 rate generally available on the black market, which the reform aims to kill.
Currently, it is not legal to transfer hard currencies electronically into Cuba, largely because of US sanctions, although trying to enable this appears to be in government plans. The greatly overvalued official rate will continue to apply to most other transactions in the largely state-run economy, but this will create serious problems and imbalances, so expect the new rate to gradually take over.
Latest annual inflation was 26.2% at the end of May and it is likely to continue to rise. However, many prices, especially of imported goods, were already priced according to black-market exchange rates, so the effect may not be excessive.