BASSETERRE, St Kitts (CMC) — The St Kitts-based Eastern Caribbean Central Bank (ECCB) is commemorating 49 years of the Eastern Caribbean (EC) dollar being pegged to the United States (US) dollar at a fixed rate of EC$2.70 to US$1.00.

“This is a tremendous achievement by the collection of Small Island Development States (SIDS) of which we ought to be justifiably proud,” said ECCB Governor Timothy Antoine.

The EC dollar is the official currency used in Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent and the Grenadines, St Kitts and Nevis, as well as Montserrat.

The British Virgin Islands is the only Organisation of Eastern Caribbean States (OECS) state which is not a member of the Eastern Caribbean Currency Union (ECCU).

Antoine praised the important decision the framers and founders took on July 7, 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,” Antoine 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,” he added.

Antoine said that apart from enjoying relatively low inflation, 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, noting also that there are no exchange rate controls.

He said this 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,” the governor said.