For Travels Heading to the Caribbean, a Weak Dollar Is No Nightmare
August 10th, 2007 by Helen Sarkanova
Coasts and islands in the Caribbean Sea are an excellent travel destination for beautiful white-sand beaches, warm turquoise waters, great snorkeling and diving spots, and their fascinating, often untouched exotic environment. With the U.S. dollar recently hitting its lowest point in 15 years against an index of other major currencies, they are also extremely strategic places to visit currency-wise. The majority of the countries in the Caribbean have their currencies tied to the US dollar. In other words, values of these currencies are matched to the value of the U.S. dollar: as the reference value of the U.S. dollar rises or falls, so do the currencies pegged to it. Hence, exchanging greenbacks for the currencies tied to the U.S. dollar doesn’t become more expensive or less advantageous, even as the value of the U.S. dollar falls.
Therefore, while a trip to Europe might be rather expensive these days, a vacation in the Caribbean is, in terms of currency exchange rates at least, just as affordable as it was last summer. Aruba’s guilder, the Barbados dollar, the Caymanian dollar, the Antillean guilder (used in the Netherlands Antilles and Saint Martin), the East Caribbean dollar (used in Grenada and Saint Lucia), or the Haitian gourde are all pegged to the U.S. dollar. In addition, some countries such as the British and the United States Virgin Islands, or Puerto Rico use the U.S. dollar as their currency, or have a currency which value is equivalent to the U.S. dollar (the Bahamanian dollar).
Similarly, some continental countries with Caribbean coastlines and islands that are attractive vacation spots have currencies fixed to the USD. The value of the Belize dollar, the Honduran lempira, as well as the Suriname dollar and the Venezuelan bolivar correspond to the value of the United States’ currency. That way, you don’t have to worry that the current exchange rates will turn against you when planning a beachfront getaway in Belize or a diving trip to Honduras.
While currencies of many countries in the Caribbean are fixed to the U.S. dollar and hence guarantee exchange rates immune from the dollar’s falling value, there are some exceptions. Local currencies of the Dominican Republic, Jamaica, Colombia, Guatemala, Nicaragua, or Mexico are not pegged to the U.S. dollar, but still remain affordable. Martinique and French Guiana are, however, French territories, and hence use the currency of the European Union. With the Euro soaring to a new historic high against the U.S. dollar just a few weeks ago, these destination might not be the best choice if your are trying to prevent losing money on unfavorable exchange rates.
