MONEY MAKES THE WORLD GO ROUND
''With money in your pocket, you are wise and you are handsome and you
sing well too.” Yiddish proverb.
By Caroline Popovic
People often like to make fun of the Eastern Caribbean dollar. It’s
almost too pretty to be taken seriously. The notes are colourful with
pictures of things like great houses and waterfalls on them. As for the
coins, well, the aluminium alloy is so light that it feels as though
you have nothing in your wallet.
However, the Eastern Caribbean dollar, or the E.C. as it is known
locally should not be taken lightly. It is one of the strongest and
most stable currencies in the world.
The E.C. dollar is the currency for the eight member countries of the
Eastern Caribbean Currency Union, the E.C.C.U. For the names of those
countries, just consult the map on any one of the banknotes.
Prior to the introduction of the E.C. dollar in 1965, the region
consisted mainly of English colonies that used British Caribbean notes
and coins. However, as respective islands claimed their
independence--Trinidad and Tobago and Guyana were among the first--they
established their own central banks. The British Caribbean Currency
Board was, therefore, dissolved.
At first, the E.C. currency was tied to the British pound at a rate
of approximately EC$5 to one pound sterling.
That changed in 1976 when the E.C. dollar was attached to the United
States dollar at a fixed parity of EC$2.7 to the greenback.
“The United States was and still is one of our major trading partners
and by pegging the E.C. to the U.S. we were able to reduce foreign
exchange losses in trading arrangements by a significant proportion,”
said Central Bank executive, Sybil Welsh. “Also during the
mid-seventies, the British pound experienced prolonged devaluation
which resulted in the de facto devaluation of the E.C. dollar so we
decided to shift from the pound to the U.S. dollar,” she added.
The East Caribbean Central Bank is one of only four multi-state
central banks in the world. Established in 1983 in the Federation of
St. Kitts and Nevis, the bank’s purpose is to manage the dollar,
safeguard its international value, promote stability and help the
economic development of its member countries. Its fixed parity instils
confidence in traders and external creditors.“A key element is maintaining the value and stability of the currency is the bank’s management of the region’s foreign reserves that back the E.C. dollar,” said Sybil Welsh.“According to bank rules we must maintain an external reserve amounting
to a minimum of 60 percent of the currency issued. At the end of March
2005, that foreign reserve backing stood at 96.4 percent.”
The banknotes are designed and printed at Thomas de la Rue and
Company Limited in Great Britain. The coins are cast at the Royal mint.
There are five dollar denominations. Each one is a different colour.
Common to each denomination is the portrait of the Queen of England, a
reminder of historical ties to Great Britain.
Also on each note is the signature of the East Caribbean Central
Bank’s governor, Sir Dwight Venner along with an image of the bank’s
headquarters in St. Kitts. All notes carry a map of the member
countries of the currency union.
Each of the denominations depicts historical landmarks within the
member territories. St. Lucia gets two mentions on the banknotes. On
the fifty-dollar bill, the St. Lucia Pitons are portrayed. Declared a
UNESCO World Heritage Site in 2004, these twin peaks are among the most
prominent features of the region. The 100-dollar note features Sir
Arthur Lewis, one of St. Lucia’s most distinguished citizens. In 1979,
he won the Nobel Prize for Economics, the first black person and the
first West Indian to win this honour. Born in 1915, Sir Arthur died in
1991; he is buried in St. Lucia on the grounds of the St. Arthur Lewis
Community College on the Morne, on the outskirts of the capital,
Look again at all that pretty money in your wallet. It’s got solid
backing behind it.