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What is the East Caribbean dollar (XCD)?

Credit Ratings & Outlook

Sovereign credit ratings play an important part in determining a country’s access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.

GDP

In 2010 the total GDP was $12,149,123,953,153 in US Dollars, while the per capita GDP was $36,619. It grew by 1.95% over the previous year.

Unemployment

The latest unemployment rate for 2010 is 9.99%.

Consumer Price Index

The latest consumer price index for 2010 is 110.61.

Political Structure

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Currency Details

The Eastern Caribbean dollar is the official currency of the eight political states in the Organization of Eastern Caribbean states (OECS). Six of these are independent states: Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines. Two-namely Anguilla and Montserrat, are British overseas territories.

The currency is issued by the Eastern Caribbean Central Bank located in Saint Kitts and Nevis. An agreement signed on July 5, 1983 at the Port-of-Spain established the Eastern Caribbean Central bank as successor to the Eastern Caribbean Currency Authority. The currency is the successor to the West Indies dollar that was used the West Indies Federation. The only member state of the OECS that does not use the Eastern Caribbean dollar as their native currency is the British Virgin Islands.

Sovereign Ratings for East Caribbean

The East Caribbean is not rated.

What does it look like?

Political Structure

The Organization of Eastern Caribbean States (OECS) is a body whose secretariat is based in Castries, St. Lucia. The OECS was created on June 18, 1981, with the Treaty of Basseterre, so-named after the capital city of St. Kitts and Nevis, where it was signed. The OECS succeeds the region’s West Indies Associated States union.

All of the members-states of the OECS are considered to be either Full or Associate members of the Caribbean Community. Member-states of the OECS are also among the next batch of countries to join the Caribbean Single Market and Economy. The majority of the OECS members-states are participants of the Eastern Caribbean Central Bank monetary authority. The regional central bank oversees the financial and banking integrity for the OECS bloc of states. Part of the bank’s responsibilities includes maintaining the financial integrity of the East Caribbean dollar (EC$).

The ECSC High court was created during the era of West Indies Associated States union. Today it handles the judicial matters in the OECS. When a trial surpasses the stage of high court within a member state, they can be passed on to the ECSU.

Prominent Figures

Director General of the East Caribbean Central Bank: Leonel Fernandez Reyna

Key Economic Factors

Individual OECS Member State Economic Overviews:

St. Lucia:

Latin American bananas have made St. Lucia’s mainstay agricultural sector increasingly competitive. Adapting to such, St. Lucia’s economy has become increasingly dependent on diversification. The island has been able to attract foreign business and investment through offshore banking and tourism industries.

Antigua and Barbuda:

The economy of Antigua and Barbuda is dominated by tourism contributing more than half GDP. Agricultural production is focused on the domestic market and constrained by a limited water supply and a labor supply that has been lured away by the higher wages in tourism and construction.

Dominica:

The Dominican economy is highly dependent on agriculture, primarily bananas, which are particularly vulnerable to weather and international competition. Development of tourism on Dominica has been difficult as Dominica is beset by a rugged coastline, lack of beaches, and the absence of an international airport. Recently, the government began a restructuring of the economy that eliminated price controls, privatized the state banana company, and increased taxes to address the economic crisis. The government is also in the process of constructing an oil refinery on the eastern part of the island.

Grenada:

Like many of the other individual member states of the OECS, Grenada relies on tourism as its main source of foreign exchange. Recent strong performances in construction and manufacturing, together with the development of an offshore financial industry, have also contributed to growth in national output.

St. Kitts and Nevis:

Throughout Saint Kitts history, sugar has been a mainstay in the economy until the 1970s. The crop still dominates the agricultural sector, however tourism, export-oriented manufacturing, and offshore banking have supplanted sugar with larger roles in the economy. Tourism is now the main source of the islands’ foreign exchange.

Saint Vincent and the Grenadines:

The economic growth of Saint Vincent and the Grenadines is highly dependent on the seasonal variations in the agricultural and tourism sectors. Events such as Tropical storms have destroyed substantial portions of crops in the past decade and tourism in the Eastern Caribbean has suffered low arrivals following September 11, 2001.

Anguilla

Anguilla has few natural resources and has shifted the focus of the economy to be dependent on luxury tourism, offshore banking, lobster fishing, and payments from emigrants. Surges on the tourism industry have spurred the growth of the construction sector, which in turn has contributed to economic growth.

Montserrat:

Beginning July 1995, severe volcanic activity has had catastrophic effects on the small yet highly open economy of Montserrat. An eruption in June 1997 closed the airports and seaports causing further economic and social dislocation. Half of the island is expected to remain uninhabitable for another decade. The United Kingston launched a three-year $122.8 million aid program to help Montserrat recover from the damage.

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