ECCB rejects Moody's suggestion to devalue eastern Caribbean dollar

BASSETERRE, St. Kitts, Thursday May 30, 2013 – The Eastern Caribbean Central Bank (ECCB) is rejecting a suggestion by the US-based international ratings agency, Moody’s Investor Services, that the Eastern Caribbean dollar should be devalued within the next five years.

The EC dollar serves as a common currency for the seven member countries of the Organisation of Eastern Caribbean States (OECS) and trades at 37 cents to the United States dollar.

Moody’s had recommended the devaluation of the currency or those Caribbean countries adopt the US dollar in an effort to address what it described as a “debt crisis” in the region.

But, ECCB Managing Director, Mrs. Jennifer Nero, said devaluation is not on the cards and that there has been “substantial analysis” done on the matter of the value of the EC dollar. 

“It’s under watch all the time, but as of this point in time there is no real reason for that (devaluation) at all,” she told Winn FM radio. 

“The currency has been within the acceptable bands, coming and going.  The volatility is within range,” Nero said.   

Asked whether the EC dollar was likely to be devalued within the next five years, Nero responded: “Well what we can say, we at this particular point in time, we don’t see that.”

The idea of a devaluation has also been dismissed by president of the Institute of Chartered Accountants of the Eastern Caribbean, Frank Myers. He said devaluation of the EC dollar won’t benefit the region such a move could enhance the region’s competitiveness.

“This is a conversation we should really stay away from, really there is no reason for us to be going in that direction.

“It’s not going to benefit us because of the makeup of our economy, we are not very export-oriented in terms of hard goods … given that tourism is our main product, I don’t see any benefits in it.”   

Myers expressed confidence in the St. Kitts-based ECCB’s handling of the EC dollar. (CMC) Click here to receive free news bulletins via email from Caribbean360. (View sample