ECCB Communications Workshop for ECCU Media Practitioners

Eastern Caribbean Central Bank

Conclusions • The nature of the arrangement in the ECCU, the establishment of a fixed exchange rate regime, limits the ECCB in the policy tool options for conducting monetary policy as traditional objectives of Central Banks (i.e. low inflation) become secondary to the maintenance of the peg. • The fixed exchange rate peg/Quasi – Currency Board, as exists in the ECCU implies an adoption of the monetary policy of the economy to which the currency is pegged. In the case of the ECCU the pegging of the EC dollar to the US dollar implies adherence to the monetary policy of the Federal Reserve Bank of the United States.

• The arrangement with US monetary policy makers by way of the peg blunts the effectiveness of traditional monetary policy instruments utilised by the ECCB, as initiatives made by the ECCB that are inconsistent with US monetary policy will be ineffective in the long-run.

Transforming The ECCU Together

3/30/2026

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