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Bahamas: Minimal impact from the declining U.S. dollar on the Bahamian economy
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Minimal impact from from declining U.S. dollar:
By TERENCE MURRELL,Guardian Business Desk -
Nassau, Bahamas:



The declining value of the U.S. dollar against other currencies such as the euro and the loonie, has so far had a minimal impact on Bahamian businesses, many of whom import goods from the U.S., in particular Florida.

"The impact is not being felt as strongly, as most of the importation occurs from the U.S. market, particularly Florida, but it is certainly something we need to watch, particularly as it pertains to purchasing power, an issue which local businesspersons are grappling with," said Philip Simon, Executive Director of the Bahamas Chamber of Commerce. "Essentially the declining U.S. dollar means exporters may be getting less with the same currency," he noted.

The U.S. dollar continued to slip against most major currencies yesterday, as traders awaited for economic reports on the European Union to be released this week. In fact, the dollar has declined as much as 9 percent against the euro, up until the middle of January. It also weakened yesterday against the Swiss franc, the Japanese yen and its other European counterparts. At about 3:14 a.m. yesterday, the dollar traded near 1.4577 against the euro, 1.0953 versus the franc and 106.60 versus the yen.

One benefit of the euro's strength is that tourism destinations like The Bahamas, with a currency which is fixed to the U.S, dollar, are becoming more attractive to the European tourists, specifically as it relates to cost.

"Certainly there are advantages in targeting more aggressively the European tourist, as there are obvious benefits to the European tourist with the currency conversion," said Simon. In addition, a European tourist spending the same as an American would, of course, leave more currency in the economy. There is something to be gained by the Ministry of Tourism if it decides to market more aggressively in the European market. Of course, the currency conversion may also mean that it is becoming more expensive to market and advertise in that market as well," said Simon.

He stressed, however, that The Bahamas remains a viable option for tourists from the U.S., as well as the European market. In his view, the nation is yet to tap into its true potential as a tourism destination in the U.S. market.

"Travel hasn't stopped, although the argument could be made that it may slow down as a result of the economic challenges in the US," he stated. "The irony is that because of those challenges, many U.S. travelers may not be able to afford traveling to Europe and other competing markets, and of course The Bahamas can capitalize on that. We offer unique destinations and attractions, and we will always have the advantage of being close to the U.S.," he pointed out.

February 12, 2008 | 5:45 PM Comments  0 comments

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