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July 5 marks 41 years that Barbados’ currency has been tied to the United States dollar.
According to the Central Bank of Barbados’ 1975 Annual Report, it was on this day in 1975 that the late Right Excellent Errol Barrow, then Prime Minister of Barbados announced that the Barbados dollar would no longer be pegged to the British pound but would instead be fixed to the US dollar at a rate of USD1.00 to BBD2.00.
This decision was made against the backdrop of the volatility of the British pound which resulted in increased cost of imports.
Over the years, protecting the peg, as it is called, has become a central goal for successive governments, and it is something for which Barbados has been lauded by highly respected international economists, including Per Callessen, former Governor of the Central Bank of Denmark, and Dr. Fred Bergsten, Founding Director of the Peterson Institute for International Economics.
The importance of protecting the value of the dollar is something Dr. DeLisle Worrell speaks extensively on in the inaugural issue of Economic Insight.bb, a new Central Bank of Barbados publication that will be available from July 26.
2016-07-05