Bank of the Eastern Caribbean: Currency Management and External Reserve

Introduction

In a move to enhance the stability of the regional economy, the Bank of the Eastern Caribbean (the “Bank”) has introduced new regulations governing currency management and external reserve.

Currency Management

The Bank is responsible for arranging the printing of currency notes and minting of coins, as well as securing and keeping unissued currency. The Bank will also have the power to call in any currency it deems necessary, a move aimed at withdrawing notes from circulation and ceasing them from being legal tender.

Issuance and Exchange of Currency

According to Article 21, the Bank shall issue, re-issue, and exchange on demand currency issued or deemed to be issued by it. However, if there is a temporary unavailability of requested issues or denominations, the Bank may deliver currency of available issues and denominations that most nearly approximate those requested.

Enforcement of Anti-Counterfeiting Laws

The Bank has been given the power to assist in the enforcement of any law related to the counterfeiting of currency in the territories of the Participating Governments. Certification by a duly authorized officer of the Bank that an item is or is not genuine shall be prima facie evidence of the fact in any legal proceeding.

External Reserve

Article 24 outlines the composition of the Bank’s external reserve, which consists of:

• Gold
• Foreign exchange
• Internationally recognized reserve assets
• Bills of exchange
• Treasury bills issued by foreign governments
• Securities issued or guaranteed by foreign governments or international institutions

The Bank must at all times maintain this reserve in an amount not less than 60 percent of the value of currency issued or deemed to be issued by it and in circulation and other demand liabilities.

Conclusion

The new regulations are aimed at promoting stability and ensuring the effective management of the regional economy.