ECCB Celebrates 49 years of Strength and Stability of EC Dollar Peg
The Eastern Caribbean Central Bank (ECCB) is commemorating 49 years of the EC dollar being pegged to the US dollar at a fixed rate of EC$2.70 to US$1.00.
Governor, Timothy N. J. Antoine says, “this is a tremendous achievement by the collection of Small Island Development States (SIDS) of which we ought to be justifiably proud.”
The Governor praised the important decision the framers and founders took on 7 July 1976 to move the peg from the pound sterling to the US dollar, as the United States had become the region’s major trading partner at the time. “What the decision has done more than anything is to allow us to enjoy relatively low inflation,” Governor Antione said. “Typically, over the 49 years, inflation has been between two and three per cent on average, except for years like in 2022, during the pandemic, when it went to nine per cent,” the Governor added.
Apart from enjoying relatively low inflation, Governor Antoine says that the peg also gives confidence in the strength of the EC dollar. “It sends a very important signal not only to locals, citizens and residents but also to investors,” he said. Additionally, there are no exchange rate controls, this, Governor Antoine explains, means that “when you need foreign exchange, you go to your bank and if the commercial banks do not have it, then they can buy it from the Central Bank which keeps a ready and ample stock of reserves at all times.”
Forty-nine years of monetary stability is therefore a wonderful achievement by the governments and people of Eastern Caribbean Currency Union and long may that continue, Governor Antoine says.
