Weaker US $ threat to TT

THE COST of imports and exports may be affected by the decrease of the US dollar, which dropped eight percent against the euro, yuan and other currencies over the last couple of days. According to Trinidad and Tobago Chamber of Commerce president Christian Mouttet, local businesses are going to be paying more to import goods from non-US sources, since most trade is conducted in US dollars, even though the prices may be quoted in the currency of the trading country. He said the increase in the euro over the last few months has so far been reflected in the increase of a number of goods such as milk, and noted that this trend could continue if the US dollar continued to decrease against other currencies.

Mouttet said while it was the hope of the Chamber for the situation to stabilise, the projection is that the US dollar would continue to decline in the short and medium term, which would be a bad thing for trading. Mouttet also explained that citizens who travel to European countries would also feel the difference, noting that in the past “we” were paying $5.50 for a euro, now it has gone to $8, while the pound sterling, which formerly cost $9 is now selling for $11. But the view of  president of the San Juan Business Association Gail Merhair reflected a different perspective. Merhair explained that the decline in the US dollar was not a matter of concern at this time. She said this was normal after an election. In addition she said local traders did not do much business with the US at this point, and as such should not be adversely affected by the decline. She also stated that with the decline of the US dollar, local traders would be paying less for importing goods. “What we have here is a paradoxical effect,” stated Merhair, “we would be importing at a lower price, and as such exporting at a lower price, so its neither a win nor lose situation.”

Also commenting on the decline of the US dollar was president of the Trinidad and Tobago Manufacturers Association, Anthony  Aboud who noted that “as the value of the US dollar declines, manufacturers and businessmen alike can expect an inflation in the cost of imported materials.” He explained that with the weakening of the US market, certain advantages and disadvantages would arise. “One of the disadvantages would be that the price of importing materials would increase, since the cost of obtaining foreign currency such as the euro and the pound has become more expensive,” said Aboud. In terms of exports, Aboud said, there would be a slight price advantage, where it would become cheaper to buy the currency. This, he explained would mean more profits for exporters.