Thousands of Northern consumers are now travelling south of the Border to capitalise on the favourable exchange rate, which has made most goods here at least 15 per cent cheaper than across the border.

"It's made for a great Christmas and New Year," says Mr Eoin Leavy, the owner of two pharmacies in Dundalk and chairman of the retail committee of the local chamber of commerce.

"There has been a substantial increase in the number of shoppers from the North coming down. We have also had the added benefit of local people not willing to pay the premium of 18 per cent or so by going North."

Grocers, service stations and gift shops have benefited most from the currency differential, which the chamber has sought to take advantage of in publicity campaigns across the Border.

"We're very optimistic it will keep up in the foreseeable future, even though business tends to slow down over February and March." He adds that the rise in sterling has had "practically no impact" yet on the price of goods imported from Britain.

The biggest savings for Northern consumers can be made on petrol and cigarettes due to the added benefit of lower taxes and excise duty here. In pounds, the former works out as much as 25p a litre cheaper in the Republic, while a box of 20 cigarettes costs up to 70p less.

Mr Matt McEvoy, a department store owner in Dundalk, says the currency fluctuations have helped to increase his sales by about 15 per cent.

"We've two stores in Newry and one in Lurgan, and I've seen many regular faces from there coming down to do their shopping in Dundalk," he says.

An indication of the extent of this influx can be seen at the town's Long Walk shopping centre, where almost every third car has a Northern Ireland registration.

Mr Sean Fitzpatrick, from Warrenpoint, says that a saving of up to £5 a week on petrol is the bait which attracts him to the centre.

"We'd buy our petrol first and then stay to do some shopping, not so much for groceries but for clothes and household goods."

Letterkenny in Co Donegal is another Border town benefiting from the exchange rate situation.

Mr Jack O'Herlihy, secretary of the town's chamber of commerce says "the currency fluctuation has given us a definite boost". However, he says: "It has coincided with a general upward turn in the town, as a result of investment in new shops and improving facilities."

Hundreds of shoppers now travel across the Border to the town each week, mainly from Derry and Strabane and some from as far as Omagh, more than 30 miles away.

Of all the Border towns, however, perhaps Monaghan has benefited most. At weekends, gardai are routinely called upon to control traffic in the centre of the town, which is swelled by Northern visitors.

Mr Joe Beggan, president of Monaghan Chamber of Commerce, says the town has been in a position to benefit from the currency situation due to its expanded shopping facilities, which include a new shopping centre, opened just over a year ago.

"About £40£50 million has been spent over the past couple of years on urban renewal. As a result, Monaghan has become an increasingly important centre in the Border area, on the Donegal-Belfast axis."

He says the main beneficiaries of the exchange rate move have been petrol stations, general retailers and restaurants.

"We're finding people who used to go to Eniskillen and other shopping towns are now coming to Monaghan."

Mr Paul McCarthy, manager of the Quinnsworth store in the Monaghan shopping centre, says people from throughout the North are travelling to the town, "from as far west as Eniskillen, as far east as Newry and, dare I say it, we even get a few from Belfast.

"Between June and Christmas, we found our Northern trade had doubled. In January alone, it doubled again."

He adds that "while the exchange rate is a great draw, what keeps people here is the range of facilities and the better value. On a pound-for-pound basis, food is as good if not better value here compared to the North."

Mr Gordon Fleming, managing director of Super Valu in Monaghan, agrees. He found that a shopping trolley of groceries which cost £81.08 sterling in the North was just £80.21 here.

He adds that the effect of the lower rate has been "phenomenal". Sales of electrical goods have increased by 70 per cent compared to last year, giftware by 25 per cent, while grocery sales have stayed the same, despite the new Dunnes Stores and Quinnsworth outlets in the town.