ECCB Communications Workshop for ECCU Media Practitioners

Eastern Caribbean Central Bank

Monetary Policy in the Context of the ECCB

What is a Fixed Exchange Rate Regime/Currency Peg? • A fixed exchange rate regime is a monetary policy where a country’s central bank pegs its currency value to another major currency (e.g., USD, EUR) or a basket of currencies to ensure stability. • In the case of the ECCU since 1976 the Monetary anchor has been an arrangement which maintains a currency peg of EC$2.70 = US$1.00. In other words, a minimum of sixty (60) per cent of total demand liabilities (issued in domestic currency) must to be backed by an equivalent amount in foreign currency to support at least three months of the total imports of the Eastern Caribbean Currency Area.

• The ECCB manages a foreign exchange pool in which all the countries place their reserves into a common fund on which they can draw, only by presenting local currency in exchange for the foreign currency held in the pool. 3/30/2026 Transforming The ECCU Together 9