Worrell says: Caribbean currencies ‘have outlived their usefulness’
THE time has come to permanently retire all Caribbean currencies.
This is the view of Economist, Dr. Delisle Worrell, in his latest Economic Letter for June 2019.
“The currencies of Caribbean countries have now outlived their usefulness, and have become a liability,” according to Dr. Worrell who is a former Governor of the Central Bank of Barbados.
Currently, Barbados, The Bahamas, Belize, the Eastern Caribbean teritories, Guyana, Jamaica, Suriname and Trinidad and Tobago, all have their own national currencies which along with several others from around the world, were on display at the Central Bank of Barbados.
Dr. Worrell who has written extensively on Caribbean currencies and monetary integration, has said that the currencies were devised at a time when most payments were made using notes and coin, issued in distant metropolitan centres.
“Scarcity of the means of payment was a severe hindrance to commerce. In response Currency Boards were set up, to issue local currency as needed in the colonies,” said the Economist.
He noted that the system worked well because the local currency issue was backed by an equivalent value of Sterling, in a global system of fixed exchange rates.
“In contrast, nowadays payments are made mostly by electronic communication, credit and debit cards, cheques and drafts, with settlement over digitized bank accounts,” Dr. Worrell argued.
“In today’s world,” he continued, “an own currency has become a liability for small economies, limiting access to international goods and services, exposing residents to risks of currency devaluation and inflation, eroding the value of domestic savings, increasing economic inequalities, providing a tool for unproductive government spending, and diverting attention from the need to increase productivity and enhance international competitiveness.