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MEFD October 2008

Published: Tuesday December 2nd, 2008

Domestic economic conditions continued to weaken during the month of October, as the negative effects of the turmoil in the global financial sector became more entrenched in real sector activity. Anecdotal evidence suggest a pronounced seasonal falloff in local tourism, which foreshadowed the October and November job losses, while the pace of lending for local mortgages—which help support construction—continued to moderate. Although the cost of international crude oil trended downwards during the review month, the pass through effects of earlier increases still lingered, resulting in the domestic inflation rate firming for the 12-months to October. On the monetary front, both bank liquidity and external reserves contracted during the month, due partly to increased net foreign currency outflows and a larger net drawdown in Bahamian dollar deposits.

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