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Dominica: Banking and Finance
Country Study > Chapter 4 > Economy > Banking and Finance

BANKING AND FINANCE


Dominica was a member of the Caribbean Development Bank (CDB) and the Eastern Caribbean Central Bank (ECCB). The CDB provided financial facilities for infrastructure and development program activities either bilaterally or as a co-financing partner with the World Bank, since July 1976. The exchange rate has remained fixed at EC$2.7 per US$1.

The institutional arrangements of a shared common currency mean that decisions about exchange rates cannot be made by any one member nation. Given the differing production profiles of the OECS countries, the various national economic policy imperatives do not necessarily coincide either in objective, direction, or timing. When coupled with the difficulty of decision making within a regional institution, the arrangements concerning the ECD and the ECCB are major constraints on the effective use of the exchange rate as a tool of national economic policy. In Dominica's case, the constraints have led to the use of wage policy as an alternate tool of macroeconomic policy, a situation that can be domestically unpopular and can limit the ability of the government to direct economic growth. Throughout 1986 Dominica was able to mitigate the effect of a fixed exchange rate because of the strength of the pound sterling, the currency in which most foreign exchange earnings were earned.

Data as of November 1987




Last Updated: November 1987


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Dominica was first published in 1987. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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