The ringgit has been rattled; the pound has been pummelled; the baht
has been battered; and the less said about the yen the better.
Across the globe, currency markets are in turmoil. Only the safe haven US
dollar has risen above the carnage, leaving travellers confused about
where their precious pesos or pounds will deliver them the best value
Will it be Disneyland California or Disneyland Paris? New York or New
Zealand? Phuket or Pyongyang? Perhaps not Pyongyang, where the North
Korean won has been holding its own in currency markets.
The internationally traded Chinese yuan has fallen to its lowest
level since data first became available in 2011. The Japanese yen has
depreciated about 20% against the US dollar this year.
The pound recently fell to its lowest level against the dollar in 37
years, the result of which, according to research from travel money
specialists, No1 Currency, is that a fifth of holidaying Brits are
cutting down on restaurant meals, with roughly 20% avoiding room service
It is no coincidence that countries in Asia have followed Japan’s
move to wind back pandemic travel restrictions. The quick recovery of
tourism in pandemic-plagued destinations will pump money into flagging
economies after two years of stagnant growth.
in the US to hike interest rates while other countries have eased
theirs are only part of the foreign exchange crisis that has impacted
Increasing energy, supply chain and distribution costs are driving some countries towards recession.
And while some dollar-rich tourists will benefit from weak currencies
when they travel to Bangkok, Kuala Lumpur or Sydney, they will be
paying more for their flights because demand is way ahead of capacity,
and international fares are skyrocketing.
will also find higher prices on the ground when they reach their
destinations, wiping out the gains from swapping their dollars into
As one golf tour operator in the UK puts it, “The net effect is much
the same - what the Americans are saving in the exchange rate is offset
really by the amount of increase in input prices across the board - the
prices we pay for golf courses, for hotel accommodation, car rental and
CONCLUSION: Exchange rates fluctuate. They can come down as fast as
they rise. More aptly, after more than two years of lockdown, people’s
appetite for travel won’t be stopped just because they are paying a few
cents more for a coffee in Kuta or a few dollars more for a spa
treatment in Saigon.