The Eastern Caribbean Central Bank (ECCB) will celebrate 41 years since the EC Dollar has been pegged to the US Dollar at a fixed rate of EC$2.70 to US$1.00. The EC Dollar was pegged to the US Dollar on 7 July 1976. Since then, the Bank has been safeguarding monetary stability by engendering confidence in the currency and low inflation through the maintenance of the fixed exchange rate peg.
The ECCB is the sole institution authorised to issue and manage the EC currency and in executing this function, the Bank’s principal focus is to maintain the currency’s value and stability.
A key element in maintaining the value and stability of the currency is the ECCB’s management of the region’s pool of foreign reserves, which comprise foreign cash and bank balances held abroad and foreign securities such as treasury bills and bonds. These reserves back the EC Currency.
Over the last financial year ended 31 March 2017, the EC Dollar consistently maintained a backing ratio of over 90 per cent which surpassed the legal backing of 60.0 per cent as mandated by the ECCB Agreement and the operational backing of 80.0 per cent.