50 years ago: Britain devalues pound

This week in Cayman

In the Nov. 22, 1967 edition of the Caymanian Weekly, a precursor of the Cayman Compass, the following story titled “Britain devalues pound: How it will eventually affect you,” appeared on the front page:

“Great consternation spread throughout the Cayman Islands, and no doubt elsewhere in the world, when Great Britain announced her intention to devalue the pound sterling, as from the 18th.

“If Jamaica devalues her currency, for us it will mean that we shall have to pay £40 instead of £35 for every 100 dollars, each £1 being worth only 17/-, i.e., a drop from £2.80 to £2.40. A U.S. dollar will be 8/- and 1d = 1c.

“An emergency public holiday was declared by the Government on Monday and all banks, stores, government offices, etc., were closed to enable adjustments to be made.

“During the morning, an emergency meeting of the Chamber of Commerce was held and the matter fully discussed. It was not possible for members to make a final decision until notice had been received from Jamaica as to whether they intended to devalue the Jamaican pound to which our currency is pegged. It was therefore agreed that all stores should remain closed until further information was received from Jamaica, and that should the Jamaican pound be devalued, merchandise now in all the stores would have to be increased in price. The Chamber recommended to its members that an increase of 1d in the 1/- or 8.5% would be fair, having regard to the fact that merchants would not make a loss on merchandise that had already been paid for.

“At the meeting, merchants did acknowledge that the wages of their staff would have to go up in a corresponding amount, i.e., 15% in view of the increase in the cost of living. “Unlike Britain, where the man in the street will only have to pay more when he buys foreign products, everybody here will be affected because practically all we purchase comes from the United States, and has to be bought with dollars.

“People investing their dollars here will be at an advantage but those who are paid for their services in sterling will be adversely affected, and there is no doubt that salaries and wages generally will have to be raised.”

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