One of four buildings which house the Headquarters of the Eastern Caribbean Central Bank and its affiliated institutions.

At the just concluded Monetary Council Meeting at the Headquarters of the Eastern Caribbean Central Bank (ECCB) in Basseterre, under the chairmanship of St. Kitts and Nevis Prime Minister and Minister of Finance, Hon. Dr.

Denzil L. Douglas, Ministers of Finance from the 8-member countries noted the almost thirty years of exchange rate stability in the ECCU and recognised the importance of competitive wages, prices and productivity to maintaining such stability.

The Ministers of Finance or their representatives from Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines, reaffirmed a commitment to implement decisions which support continued currency stability.

According to the ECCB, the introduction of the Eastern Caribbean (EC) Currency and the establishment of the Eastern Caribbean Central Bank (ECCB) are two milestones of which the people of the region can be proud. Eight small islands in the Western Hemisphere, with a population of approximately 600,000, possess a strong and stable currency issued and managed by the ECCB, one of only four multi-state central banks in the world.

The history of the EC Currency and the ECCB embodies the story of the coming of age of these small island states. Together, the EC Currency and the Eastern Caribbean Central Bank have performed in ways that have contributed to the growth, prosperity and self-determination of the people of the Eastern Caribbean Currency Union (ECCU). Let us therefore take a short journey into their history.

Prior to the existence of the EC Currency, British Caribbean notes and coins constituted the currency in circulation. These were issued by the British Caribbean Currency Board (BCCB), which was established in 1950 as the regional authority with the sole power to issue currency for its member

countries: Barbados, British Guyana, The Leeward Islands, The Windward Islands and Trinidad and Tobago.

After Trinidad and Tobago and British Guyana obtained their political independence from the United Kingdom, these two countries elected to withdraw from the British Caribbean Currency Board to establish their respective central banks.

Their withdrawal led to the dissolution of the BCCB and the establishment of the East Caribbean Currency Authority (ECCA) in 1965 as the authority to issue and manage a common currency for Barbados, and the Leeward and Windward islands with the exception of Grenada. Grenada became a member of the ECCA in 1968. In 1974, Barbados withdrew its membership from the East Caribbean Currency Authority to establish its own central bank.

CUOPM notes that as a result of the sterling efforts on St. Kitts and Nevis

Chief Minister Hon. Robert Bradshaw, the Headquarters of the Eastern Caribbean Currency Authority (ECCA) was transferred to St. Kitts.

From October 1965 to July 1976 the EC Currency was pegged to the pound sterling at a rate of EC$4.80 to £1.00. In July 1976, almost 28 years ago, the peg was transferred to the US dollar at a parity of EC$2.70 to US$1.00.

While the ECCA ensured the sound management of the issuance and redemption of the EC Currency, and of the region's portfolio of assets, it had limited powers to significantly influence the economic and financial affairs of the region. This limitation gave rise to the need for a central bank.

In 1981, as part of the Treaty of Basseterre establishing the Organisation of Eastern Caribbean States (OECS) it was agreed that the member states should have a common currency and a common central bank. On October 1st 1983, The Eastern Caribbean Central Bank was established.

The ECCB's principal purposes are to issue and manage the Eastern Caribbean currency, to safeguard its international value, to promote monetary stability and a sound financial structure and to promote the economic development of the participating countries: Antigua and Barbuda, Anguilla, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St.

Vincent and the Grenadines.

The EC dollar serves as a source of stability for the people of the ECCU.

The fixed exchange rate provides holders with confidence in the value of the EC currency. On the international level, the stability of the value of the currency allows ECCUs trading partners and external creditors to have confidence in the currency that forms the basis of the economies.

The ECCB plays a critical role in the development of the economies of the region through the provision of policy advice to member governments, and ongoing consultations with key governmental officials and private sector stakeholders. The ECCB is also focused on the strengthening of the financial system via the development of key regional financial institutions and markets. Among these are the Eastern Caribbean Home Mortgage Bank (ECHMB), the Eastern Caribbean Institute of Banking and Financial Services (ECIB) the Eastern Caribbean Securities Exchange (ECSE), the Eastern Caribbean Securities Market (ECSM) and the Regional Government Securities Market (RGSM).