Government has no plan to abandon the Barbados dollar in favour of using United States (US) currency as the country’s legal tender – a process known as dollarisation.
Minister in the Ministry of Finance Ryan Straughn made this clear in the House of Assembly last Tuesday as the Foreign Currency Permits Act was approved after debate.
Former Central Bank of Barbados Governor Dr. DeLisle Worrell is a consistent proponent of dollarisation, arguing that it would remove the threat of domestic currency depreciation and associated economic instability.
Opposition Leader Ralph Thorne’s mentioned Worrell’s advocacy on the issue and invited “the economists in this Chamber at some propitious time to express themselves and to educate the people of Barbados on the issue of dollarisation”.
“We all sit as an audience with great excitement to hear what the economists will tell the people of Barbados. I say that too because we know that there are other countries in this region, Turks and Caicos, for example, the US dollar is their local dollar,” he Thorne said.
“Cayman [Islands], they have their dollar, but that dollar is apparently on par, and perhaps a few minor units higher than the US dollar.
“But it is a discussion that I invite the Government to participate in at some point, not only in terms of educating the people of Barbados, but also for the purpose of telling the people of Barbados what is the government’s policy position in light of what a former governor of the Central Bank has said,” he added
Straughn said in response that dollarisation was not on the cards and that “the exchange control authority in this country . . . we have committed ourselves to maintaining a fixed exchange rate”.
“There is no change in contemplation as it relates to the foreign exchange peg on the part of the Government,” said the minister, who is an economist.
“But if at any point in the future, there was to be any contemplation of shifting from one currency to another, it really doesn’t matter, the country has to earn the foreign exchange in order to do business with the rest of the world.”
He said, therefore, that “in effect it really doesn’t matter whether it is two to one, whether it one to one, whether it is 100 to one, it really doesn’t matter the number, except we have determined that we will be fiscally disciplined in order to maintain the current peg at two Barbados dollars to one US dollar”.
