July 31, 2014
ECCB Governor Sir Dwight assures that EC dollar doing well

The governor of the Eastern Caribbean Central Bank is assuring the public that the Eastern Caribbean dollar is performing well – confirmed by the institution’s internal checks, as well as that of the International Monetary Fund.{{more}}

This was announced by Sir K Dwight Venner last Friday, July 25 at a press conference held after the handing over of Chairmanship of the ECCB monetary Council.

Sir Dwight explained that the IMF’s Annual Common Policies Report indicated that “there is no need to change the priority of the currency”.

“That comes as very good news,” he insisted.

Furthermore, he confirmed that the ECCB’s checks support this view, explaining that there are several factors they measure to “ensure the dollar is performing as it should.”

One such factor is that of the foreign exchange reserves that back a currency. Sir Dwight said that the legal limit for this is 60 per cent and the operational limit is 80 per cent. Currently, the EC dollar is at 95 per cent.

“The backing is way above the legal limits,” he stated.

He said the ECCB also conducts a technical judgment of the currency, and makes an assessment based on the markets for foreign exchange.

“We have what we call ‘open account’. That is to say, there is no foreign exchange controls,” Sir Venner explained. “If there was an issue with the currency [EC dollar], you would have capital flight. In other words, people would move their money out of the currency.”

“In fact, to our surprise, the rate is 2.70… if you go to top hotels and so, you’d know they give you 2.50, which is a re-evaluation of the currency.”

Sir Dwight also added that the IMF measures the amount of foreign exchange that backs imports, and the EC dollar is presently surpassing the median range. (JSV)