A former central bank governor is calling for Caribbean countries to give up their individual currencies and adopt the United States dollar.
Dr. DeLeslie Worrell, the former governor of the Central bank of Barbados, told a conference organised by the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) earlier this week that switching to the US currency would essentially eliminate the threat of domestic currency depreciation and with it, the resulting possible disruptions to economic stability.
He said there was no time like the present to switch to US currency, noting that the process is not as difficult as some people may imagine.
Worrell suggested a two-prong process, which involves physically purchasing US notes and coins as well as digital frameworks.
“The local currencies can be entirely redeemed by the Central Bank by purchasing and importing US currency notes and coins using their existing foreign reserve balances. Central banks and monetary authorities in the Caribbean all have foreign reserves sufficient to purchase US notes and coins to replace the full issue of local currency at the prevailing exchange rate,” he said, adding that most Caribbean Community (CARICOM) countries have the requisite foreign reserves to facilitate the recommended dollarisation process.
“All deposits and other liabilities of the banking system are held in digital record and that an equal amount of credit and other assets would also be held in digital record. All that would be required for these balances, is to convert both sides of the balance sheet from local currency to US currency at the prevailing exchange rate.”
There has been widespread speculation here that the Barbados dollar could be devalued and in his presentation, Worrell addressed the situation.
“Domestic currency depreciation brings challenges that inhibit the country’s economic development prospects. It undermines investor confidence. It undermines investor confidence because prospective investors know that devaluation would be inflationary and would trigger increases in import cost as well as unease and unrest in the labour force.
“The threat of devaluation also leads to capital flight as businesses and wealthy individuals switch to the US dollar value system,” said Worrell, arguing that the recurring threat of domestic currency depreciation also widens the disparity in income distribution.
I’ve never heard anything so stupid. You don’t prop up and another countries economy and currency.
I am really glad that someone with sense see the need for all the countries in the Caribbean islands, although technically it is all apart of North America. But you will gives some of them the benefits of the doubt still calling themselves Caribbean islands people, but I did mentioned on couple occasions. That Jamaica over the longest time to dumped their currency, and used the United States currency as their official currency and. What that would do is cut down on the large migration to other countries, and that would cut down on the high inflation rate. Also cut down on crimes, because there would be no competition where people is trying to grabbing after the U.S. dollars. I remember in the 196os when the Bauxite companies did want to paid the workers in U.S. dollars, the government of Jamaica turned it down. Say it would caused too much problems, because the Jamaican currency was way have more values than the U.S. dollars. In the 196os up to 1972 the United States dollar only values 89 Jamaican cents,until later in the 1980.The United States dollar only values $ 1.76cents to one Jamaican dollar, then the Jamaican dollar is devaluing like a running stream.I hope that the government of Jamaica would dumped the Jamaican dollar, and started to used the United States currency as their official currency if they mean the country any good. When I left Jamaica to the United States, the Jamaican dollar was less than 4 to one u.s dollar and looked how far it had reached. Because of poor management by the government, and the Bank of Jamaica, also the private sectors.Because they are one of the main perpetrators towards causing the dollar for devaluing, because they are buying the U.S. dollars on the black market. I remember in the 196os early 1970s if someone gave you a U.S. dollar in Jamaica, it would be one of the biggest insult, because the Jamaican currency was way have more values than the U.S. dollars.according to the money war right now, it would be good as what this guy from Barbados was saying. That the countries in the Caribbean islands should just dumped their currencies, and started using the U.S. dollars as their main currency and. That makes a really good sense, because it will stop the large brain drain from these countries. Because you are making the same dollar in your country, so you are not interested to leave.