Wednesday, August 12, 2009

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Exchange sales come back from vacation By VERNON CLEMENT JONES ~ Guardian Business Editor ~ vernon@nasguard.com: With or without any real hint of an economic turnaround Bahamians have renewed their travel spending, with the latest Central Bank data for April pointing to growth in exchange control sales. While year-to-date the falloff in demand for greenbacks to travel abroad with is down 31 percent, for the month of April that decline eased to just under 25 percent. It's the first upward movement in that key economic indicator this year and suggests that Bahamian consumer confidence has also risen since the dark days of September 2008 and the Lehman Brothers collapse that sent Wall Street into a tizzy. The fact that April's decline compared to those for March and February appeared to slow may be a sign that economic turnaround — at least in the minds of consumers — has begun. The travel data also lends credence to a nascent Bahamian consumer confidence reading taken in the second quarter and pointing to the lifting of a dark cloud hanging over the local economy. Still, it's not yet a trend local travel agents dealing with Bahamians have picked up on, said one expert Monday. Cheap and cheerful junkets to South Florida continue to be curtailed by the growing number of Bahamian consumers facing unemployment. Those still on the job are themselves pulling back, fearful of joining the more than 14 percent of us out of work. Still, travel spending is seen as a forward indicator, being another barometer of consumer confidence. April's relatively good performance means that Bahamians were more optimistic about their own personal outlook headed into the make-or-break summer vacation season. That good cheer was likely dashed in May. Area hotels continue to complain about weak stopover numbers, which have seen a double digit decline for New Providence. That's had a negative effect on staffing levels not only at those resorts but across the retail and hospitality sector. The broader economy has also seen layoffs mount as employers seek to trim overhead costs. Those factors all suggest the Central Bank isn't likely, any time soon, to see demand for U.S. currency creep up back to the $19m it meted out in April 2008. Still, the government hasn't been anxious to see that kind of climb. Late last year, the Central Bank moved to encourage ordinary Bahamians to rein in on foreign currency purchases that would tap its reserves. Still, only this month it sanctioned the Cable Bahamas share buyback deal poised to deplete its foreign currency cache by some $20m. In giving Cable the green light, say critics of the deal, the bank has now opening itself up to charges of having applied a double standard. Ironically, in fact, the curtailed demand for U.S. currency by Bahamians may have helped pave the way for the CAB share purchase. Tuesday, July 14, 2009