The Eastern Caribbean Central Bank (ECCB) is marking 37 years since the EC Dollar has been pegged to the US Dollar at a fixed rate of EC$2.70 to US$1.00.
The EC Dollar was pegged to the US Dollar on 7 July 1976. Governor of the ECCB the Honourable Sir K Dwight Venner says the peg is the anchor which has given investors and citizens of the Eastern Caribbean Currency Union (ECCU) certainty and confidence in the stability of the EC Dollar.
The fixed exchange rate policy is the pillar that supports the stability of the EC Dollar and the ECCB Monetary Council is committed to maintaining this pillar. The EC Dollar has a backing ratio which has averaged 96.0 per cent over the last financial year ended 31 March 2013. That ratio surpasses the legal backing of 60.0 per cent as mandated by the ECCB Agreement and the operational backing of 80.0 per cent.
In a recent interview with a media house in St Kitts and Nevis, the Governor said that there were no immediate economic conditions that would warrant a change in the value of the EC Dollar. “There is no flight of the currency, not that we or anyone have noticed. There is no run on commercial banks. There is no hyperinflation; inflation is being contained to 2.0 or 3.0 per cent. These are the objective conditions which call for a change in the value of the currency. They don’t exist at this particular point in time.”