Fall in US dollar a benefit to SVG?

More European visitors may choose St Vincent and the Grenadines as their vacation destination, and the local tourism sector may have the United States dollar to thank for it.{{more}}

The United States dollar is freefalling against major currencies worldwide and Prime Minister Dr Ralph Gonsalves said earlier this week that it has served to improve the international price competitiveness of the EC currency.

“Because there was a slide of about 2.5 per cent with the US dollar in relation to other major currencies and we are tied to the US dollar, it means therefore that Europeans who are coming here would have found holidays cheaper,” Dr Gonsalves said.

Europe is second only to the Caribbean in terms of place of origin of visitors to this country.

On July 14, the US dollar had fallen to a record low against the Euro, and was the weakest it had been in 26 years against the pound, on speculation that declining consumer spending will weaken the economy and dim the allure of U.S. assets.

Dr Gonsalves also addressed the concept that some hold to: that the EC dollar’s strength is not in the best interest of its territories.

“When you look at countries like Jamaica and Guyana, which try to have a more liberal monetary policy and allow for the slide of the currency, in these small open markets, business confidence goes and the slide becomes very slippery,” he said.

“That is why all of us have sought over the years to keep the currency strong,” he added.

The EC currency is the third strongest in the Western Hemisphere after the US and Canadian dollars, Dr Gonsalves remarked.(KJ)