Wednesday, 7 July 2010 marks 34 years since the EC dollar was pegged to the US dollar at a fixed rate of EC$2.70 to US$1.00 on 7 July 1976.
Prior to this, the EC currency was fixed to the pound sterling at an exchange rate of EC$4.80 to £1.00. The decision to change the peg was made following the depreciation of the pound sterling and the emergence of the United States of America as the region’s major trading partner. At the time of the shift, the exchange rate of EC$2.70 was equivalent to the exchange rate of the pound sterling to the US dollar.
The maintenance of a strong and stable currency is achieved through the policies adopted by the Eastern Caribbean Central Bank (ECCB) which ensures that there are adequate foreign reserves available for consumers and investors to conduct business with confidence. This includes setting limits for government borrowing and the extension of credit to governments and commercial banks by the ECCB. In the 2009/2010 ECCB Annual Report presentation, Governor Venner reported that the foreign reserve backing of the currency was 93.93%, which far exceeded the required reserve rate of 60%.
The member countries of the Eastern Caribbean Currency Union continue to enjoy the security provided by the stable currency as they join forces on the path towards regional integration under the umbrella of the OECS Economic Union. For more information visit our website: http://www.eccb-centralbank.org/pegwindow.asp