Weak dollar curbs wild nights in Paris and abroad

Monday, January 28, 2008

The weak dollar didn’t just hurt the wallet of Casey Collins ’09, who is studying in Brazil for the semester. It hurt her pride, too.

“It was really depressing when (the dollar) fell below the loonie,” she said. “I have this Canadian roommate I hate, and after that happened, I lost a lot of arguments to him.”

As the dollar’s value against world currencies has fallen in the recent months, Brown students studying abroad are feeling the pinch. Students are working to stretch their money a little further, even if that means going out to eat less or traveling less.

Collins is eating in more and take fewer taxis while still trying to make the most of her time in Brazil, where a dollar trades for 1.79 Brazilian reais. Three years ago, Collins would have gotten 2.67 Brazilian reais for one dollar. “I mean, when am I going to be in Brazil again?” she said. She also follows the exchange rate closely, making ATM withdrawals only when the dollar is worth at least 1.75 Brazilian reais. She also tries to withdraw more money at once to reduce the number of times she has to pay the fine levied by her home bank, Bank of America. To avoid these fines, she is considering opening an account with a bank in Brazil.

Despite the guidelines she set for herself, Collins said it can be hard to be thrifty. “If I need to buy something, I’m just going to buy it with my credit card,” she said, adding that searching for goods at cheaper prices isn’t worth it.

For students studying in Europe, the problem is even worse. There, one dollar is equal to .68 euros as of Sunday evening. Three years ago, a student in Europe could trade .77 euros for one dollar.

“It’s definitely something everybody’s noticing,” said Ashley Lopez ’09, who is studying in Paris. “Everybody is keeping tabs on the exchange rate.”

Lopez has made a number of changes to her daily life as a result of the weak dollar. She is “definitely eating out less” and is careful about where she shops. She said her American friends studying abroad in Paris “are willing to go out of their way to get stuff done so that they don’t spend as much.” She relies heavily on the subway system, and is trying to learn about the night buses that run after the subway closes so that she can avoid taking taxis. “The (taxi) rates go skyrocket high, because they know clearly there are safety problems. But even then people are choosing not to get a cab,” she said.

Lopez said she felt the effects of the exchange rate immediately. “We just got here, so we’re still in tourist mode,” she said. “But we’re still very aware of our spending.” She has also scaled back her travel plans. “Definitely, people are thinking about traveling closer,” she said, though none of her friends has planned travel yet. “Everyone’s just being really careful with their money.”

Edward Tang ’09, who is studying in Oxford, England, said most students he knows aren’t acting that differently. “Most of the visiting students here I know understand that things are just more expensive here to begin with anyway,” Tang wrote in an e-mail to The Herald. “It’s a little hard not to spend money here since everything isn’t taken care of for you like at Brown.” He added that many students have stopped thinking about the exchange rate since there isn’t anything they can do about it. Instead of comparing prices between Oxford and Providence, Tang now compares prices for items in different stores in Oxford, he said. (A dollar in Britain fetched .51 pounds yesterday, versus .53 pounds three years ago.)

Mika Lin ’09, who is also abroad in Paris, said the exchange rate makes an already expensive city even more costly. “Overall the unfavorable dollar-euro exchange rate has been unpleasant,” she wrote in an e-mail to The Herald. “The impact of (Americans’) decreased purchasing power is fairly obvious – people travel less frequently and to less-exotic places and they are less apt to go out to restaurants or bars.” She said that a single drink at an upscale bar can be 20 euros, or almost $30, and that even a cheap bar will sell beer for at least four euros, or nearly $6.

Lin said the silver lining to the weak dollar might be the lessons imparted on Americans abroad about budgeting and finance. Now, she added, people might be driven to explore something they might not have otherwise experienced, making study abroad less of “a euphemism for endless partying.”

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