The U.S. Dollar and the Jamaican Consumer

At the risk of revealing my age I remember when the U.S dollar was equal to $5 Jamaican dollars.  At that time it was very scarce to even see currency from the United States unless you worked in the tourism sector or had relatives visiting from overseas.

I don’t remember that we were in any way flourishing financially. In fact the opposite was true as items often had to be sold or ‘married’ with other items in order to be bought.

Well let’s fast forward a few years, now it seems as if the U.S currency is deeply tied into what consumers pay at the counters.  A glance at my receipt in a recent fast food place showed my total in Jamaican and U.S. currency.

I realize that the company originates overseas, but what does this mean for us as consumers?

The Dollar’s Slide

Well I am no economist but as a concerned consumer I have been following the news reports that state that soon businesses operators will raise food prices as a result of the current devaluation of the U.S.

That is certainly bad news for consumers! While I am aware that imported goods will account for the need for the increase in certain items I wonder how much it should impact on customers.

Impact

The worst part of it all is that the U.S. dollar dictates a number of prices as some raw materials are needed for products that can only come from overseas since they are not made locally.  This makes the prices vulnerable to the dictates of the U.S. currency.

Why don’t prices fall when the Jamaican dollar strengthens against the U.S. dollar?

As of the time of this article, the U.S. dollar is being sold for $132.07 to U.S. $1, however a few weeks ago it was at $128.

So why didn’t prices fall at that time?

A lot of it has to do with the principles of business. For example when Bill  (a retail shop owner) increases the price of coffee, it can be because one or both of these reasons:

There is also the principle of ‘first in, first out’.  This principle used by most businesses means that goods that are bought first need to be sold  so they have to sell them for the price that they bought them for despite the current price at which they could now be bought by the business owner.

Anyway you look at it the results are the same as consumers will have to dig a little deeper to make their purchases.

So what are your thoughts on the issue? Let me hear from you!

Teri Ann Renee Paisley

Gleaner online writer

Tags: currency, dollars, import, Jamaican, materials, price