Inflation in Cuba: An Analysis from the Perspective of the Main Nominal Anchors of Monetary Policy

Abstract

The lack of direct and indirect instruments and the features of the Cuban monetary and financial environment have implicated the need to base the monetary policy on the use of nominal anchors for price stabilization. This article has the objective of analyzing the relevance of the official exchange rate, the money supply, and the regulated prices as nominal anchors since the economic system reformation of the early 1990s. With this objective in mind, the analysis provided by the article is divided into two sections. In the first, the use of the main nominal anchors in the macroeconomic stabilization carried out in the period 1990–2010 is evaluated. In the second, the factors that explain the loss of the main nominal anchors in the period 2011–2022 are examined.