What is the XCD (Eastern Caribbean Dollar)?
The XCD is the official currency of eight Caribbean island nations: Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. The Eastern Caribbean dollar, which replaced the British West Indies dollar in 1965, is split into 100 cents. It is thus one of the oldest currencies still in use in the area. In September 2022, one XCD will be worth $0.37 in USD.
Comprehending the Eastern Caribbean Dollar (XCD)
The Organization of the Eastern Caribbean States (OECS), an economic and monetary union founded in 1981 to coordinate trade and economic policies among the ten Eastern Caribbean islands, uses the Eastern Caribbean dollar as its official currency.2. But just eight of the member nations make use of the XCD. The British Virgin Islands utilize U.S. dollars, but Martinique, which is still connected to France, uses euros.
When the Eastern Caribbean dollar existed, it replaced the British West Indies dollar at par. The Eastern Caribbean dollar was issued under the direction of the Eastern Caribbean Currency Authority, which set its value at 4.8 XCD to 1 GBP.
The Eastern Caribbean dollar was then re-pegged to the U.S. dollar in 1976 by the currency authority at a rate of 2.7 XCD to 1 USD. The U.S. dollar peg was maintained when the Eastern Caribbean Bank, founded in 1983, took over the currency issue.
The Eastern Caribbean Bank’s mission includes the management of liquidity across all member nations, promoting monetary and economic stability via the preservation of a sound financial framework, and providing assistance for economic growth. The bank views the dollar peg as its principal tool for preserving regional price stability and controlling inflation.
Additional Caribbean Currency
Many other Caribbean countries still utilize their currencies despite their small size and proximity to one another. After using the Eastern Caribbean dollar for a while, Barbados adopted its currency in 1973 and pegged it to the U.S. dollar at a rate of two Barbadian dollars (BBD) to one USD.
In another instance, the U.S. dollar peg was the starting point for the Trinidad and Tobago dollar (TTD), which is around the same age as the Eastern Caribbean dollar. However, in 1993, the TTD switched to a floating rate. Similarly, the value of Jamaican dollars (JMD), issued by the Bank of Jamaica and used on the island, fluctuates among other currencies. Lower-denomination currencies have been phased out in practice in the nation due to high inflation.
The majority of tourist attractions in the Caribbean allow payment in major global currencies, such as the U.S. dollar (USD), British pound sterling (GBP), and the euro (E.U.), despite the region’s currency proliferation.
Conclusion
- The British West Indies dollar was replaced in 1965 as the official currency of the Organization of the Eastern Caribbean States (OECS) and is known as the Eastern Caribbean dollar (XCD).
- Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines are among the island republics that utilize it.
- The Eastern Caribbean Bank oversees the currency, which has been correlated with the U.S. dollar since 1976.
