BRIDGETOWN, Barbados, Friday February 28, 2014, CMC – Governor of the Central Bank of Barbados, Dr. Delisle Worrell is urging Caribbean countries with fixed currencies, not to entertain the thought of any devaluation as a means of restoring stability to their economies.
Worrell told the Caribbean Media Corporation (CMC) that his recommendation does not only apply to Barbados, where the local dollar is fixed at US$0.50 cents, but also to those of the Eastern Caribbean, the Bahamas, Belize, and other stable currencies in the region.
“There is no point in changing the exchange rate, for the only value of the Barbados dollar for instance, is the fact that it is a US dollar by another name,” Worrell said.
“So in a sense I feel that all independent currencies of countries that are as small as our, need to be run by Central Banks, which will provide bank supervision, and other responsibilities that fall under the Central Bank.”
Worrell said that these countries should not be entertaining monetary policy which funds government operations resulting in a decline in reserves and threaten the value of the dollar.
He suggested that currencies should be operated by currency boards, whose policies would promote confidence which is a direct link to a reserve currency.
“Apart from Barbados this should also apply to the OECS, the Bahamas, and Belize which are among currencies that worthwhile maintaining because they retain their value,” he said.
The Central Bank Governor said that in his view there should be one currency for the entire world, as all currency values were artificial.
He said it makes as much sense to have changes in the value of the dollar in relation to the Euro, as it makes to have changes in the value of a mile, in terms of a kilometre.
“It is a comparative measure so a currency does not have any value in itself, it is a measure of exchange and the notion that you should have hundreds of them in the world is silly,” he told CMC.
Worrell also poured scorn on the concept of a floating dollar, noting “the Jamaica dollar does not float, the Guyana dollar does not float, it sinks.
“”If I offered you the choice of a US dollar and a Jamaica dollar, would you ever choose the JA dollar? Of course not. But the only reason you might chose a Barbados dollar over a US dollar is because, it isn’t going to change.
“If you ever thought it would, then you would not think twice about accepting the US dollar,” he said, noting that anytime a currency is allowed to float, it disappears.
“I don’t know why people prolong the agony, I think they should just disappear with them altogether,” he told CMC.
In May 2011, Caribbean Community (CARICOM) at the end of a retreat in Guyana, said they had they have put a brake on introducing a common currency for the 15-member grouping.
“As regards the Single Economy, they recognised that the process towards full implementation would take longer than anticipated and agreed it may be best to pause and consolidate the gains of the Single Market before taking any further action on certain specific elements of the Single Economy, such as the creation of a single currency,” the leaders said in a statement. Click here to receive free news bulletins via email from Caribbean360. (View sample)