For the past eight months, SLM has spent nearly twice as much money each month to operate the children’s home! When the currency crisis first happened, we had hoped the situation would eventually stabilize, but it does not appear there will be any improvement in the foreseeable future.
Description of the beginning of the Crisis:
Reports show that during 2019-2020, the rate of inflation in Haiti had reached 40%, and Haiti decided there needed to be a correction made in the economy. In August 2020, the Bank of the Republic of Haiti injected $150 million into the economy. One result was a sudden and spectacular appreciation in Haiti’s national currency, the gourde, which created havoc across the country. One effect was the Haitian Gourde reaching an all time high of 112.30, causing the buying power of the U.S. dollar to be reduced by 50% almost overnight!
Haiti is a “dollarized economy” (the U.S. dollar is used in addition to Haitian currency). More than 60 percent of bank deposits are kept in U.S. dollars, yet banks began paying out transactions in Haitian gourdes, rather than U.S. dollars even if the amount sent to the account was in U.S. dollars. People were forced to do business in gourdes, which created a shortage of U.S. dollars in the country. Remember, Haiti imports the majority of the products used in the country. Business men often couldn’t find the dollars they needed to conduct business with the U.S. When they did find U.S. currency, the exchange rate varied widely; the further from Port-au-Prince (the capital), the higher the exchange rate was. Inflation continued, and there also began to be a shortage of goods.
The Current Conditions in Haiti:
There have not been any positive financial changes in 2021. The Bank of the Republic of Haiti has continued to try to stabilize the economy by injecting more money into the market, but the same difficulties that began in August last year have continued. Inflation has continued. For example, the price SLM paid for rice in March was 11.5% higher than February, and the price SLM paid for carnation milk was 28% higher in March than February. These are only examples of price increases that are happening every single month!
Source of Life Budget:
How is Source of Life surviving financially when the buying power of the U.S. dollar continues to be 50% lower than the ministry’s monthly budget, and prices of food are increasing every single month? First, we presented the need last October to you, our supporters, and you quickly contributed over $12,000 to help us get through the next several months. After that, two large year-end donations were received from donors who wish to remain anonymous.
We are watching the currency issues in Haiti and our SLM budget very carefully. At this time, we do not have plans to start any special fundraising unless we see that we definitely need to do that. We want to thank everyone who has prayed and given financially to Source of Life Ministries during this unusual time of need. We appreciate you! Your gifts are still being used to supplement our regular monthly budget. With your help, we have been able to continue transforming the lives of eighteen children, fifteen staff members, and their entire families with the effects rippling into the surrounding community!