The exchange rate in Jamaica is now to $78 to US $1

In Jamaica, the dollar has taken a hit, plunging from $72.85 to US $1, to $78 to US $1 in the last six weeks

This means that promised reduction in the cost of basic food items, in the face of falling prices worldwide, will not be met.

The declining dollar has sent the economic interests into a tailspin, and has seen the Bank of Jamaica (BOJ) putting several measures in place, in an attempt to stop the slide.

One of the measures has been an increase in the interest rate on fixed deposits over the last two months.

On Monday the BOJ announced the rates will increase from 14 and 16 percent to between 15 and 21 percent.

Authorities hope the move will result in the inflow of funds to Jamaica.

But while the decision will benefit savers, the business sector fears it could also reduce spending.

The main group representing the business community, the Private Sector Organisation of Jamaica (PSOJ), said the decision could lead to a rise in lending rates by commercial banks, and place more pressure on the already weak economy.

The PSOJ also wants government to reverse the decision by year end.

Manufacturers say the government may be forced to provide other means of affordable financing for the productive sector.

Fall in food prices

But while the economic crisis drags on, fuel prices worldwide have fallen to less than $50 per barrel, after peaking at $147 in July.

This drop has resulted in a corresponding reduction in some Caribbean countries.

But consumers have been pressing their governments for reduced food prices as well.

	Consumers have also been calling for a reduction in food prices

The Prime Minister of Belize said earlier this week that he expects flour prices to fall in the coming weeks.

He explained that there is a time lag between the decline in oil prices and the fall in food prices, as a result of the cost of production becoming cheaper.

Mr Barrow also noted that there's the added challenge of getting the merchants to transfer the savings to consumers.

"I'm not taking after the merchants, but there is a difficulty there and as a consequence, the consumer protection agency will have to become more activist in order to ensure that lower prices are passed on to the consumer," he told Channel 5 TV.

Job losses

The tourism sector, the region's main income earner, has also been hard hit by falling revenues and bookings because of the declining global economy.

In Puerto Rico about 200 workers at the luxury Wyndham Worldwide Corp's Rio Mar Beach Resort and Spa were laid off this week.

There are similar stories in other destinations.

The Atlantis resort in the Bahamas sent home 800 workers, while the Baha Mar Resorts dismissed about 40 employees at its Sheraton Resort and another 40 at the Wyndham Nassau resort.

The financial crisis has also halted the construction of multi million dollar resorts in the Dominican Republic, the Turks and Caicos and other Caribbean nations.