ECCB Marks 50 years of EC Dollar’s Fixed Exchange Rate

The Eastern Caribbean Central Bank (ECCB) is celebrating a major milestone in the region’s economic history as the EC dollar’s fixed exchange rate reaches its 50th anniversary.

On July 7, 1976, the governments of the Eastern Caribbean Currency Union (ECCU) fixed the value of the EC dollar at EC$2.70 to US$1.00, creating a stable exchange rate that has remained unchanged for five decades.

The decision, made during a period of global economic uncertainty and approved by the British Government and the International Monetary Fund (IMF), has since become one of the world’s longest-running fixed exchange rate arrangements.

For Montserrat and the other seven ECCU member territories, the policy has provided a stable monetary foundation, helping to keep inflation relatively low, strengthen confidence in the EC dollar, encourage trade and investment, and support long-term economic development.

ECCB Governor Timothy N.J. Antoine said the achievement provides a platform for the region’s next phase of growth.

“The past 50 years have demonstrated our capacity to deliver stability; now we must prove for the next 50 years that we can leverage that stability for transformation and shared prosperity for every citizen of this Currency Union, which is what the Big Push is all about.”

The EC dollar has maintained its value without either devaluation or revaluation since the exchange rate was established in 1976.

According to the ECCB, that stability has been underpinned by prudent fiscal and monetary policies, strong regional cooperation and legal safeguards contained in the ECCB Agreement.

Among those safeguards is a requirement that the Bank maintain external reserves equal to at least 60 per cent of its demand liabilities and currency in circulation. Any change to the exchange rate would also require the unanimous approval of both the ECCB Monetary Council and its Board of Directors.

The Eastern Caribbean Currency Union comprises Anguilla, Antigua and Barbuda, the Commonwealth of Dominica, Grenada, Montserrat, Saint Christopher (St Kitts) and Nevis, Saint Lucia, and Saint Vincent and the Grenadines.

As it commemorates the anniversary, the ECCB said it remains committed to preserving the stability of the EC dollar while supporting the region’s resilience, prosperity and sustainable development.

For many residents and businesses across the ECCU, the fixed exchange rate has provided certainty in pricing, trade and financial planning for generations, making it one of the defining features of the region’s monetary system.