We have had a few emails from different sources in the last few days – indicating that inner circles in the Barbados Government are discussing allowing the Bajan Dollar to float on the world markets. Our dollar is currently tied to the US Dollar at 2 for 1.
This rumour surfaces in Barbados about every 6 or 9 months or so. What’s different this time? The number of previously-proven good sources who are telling us about the discussions.
Does anyone know anything?
float usually infers an up and down movement
this currency will fall like a rock because they can’t hold an artificial fixed rate any longer because of the staggering debt
its going to be our inevitable devalaution
Guyana look out —here we come
you can bet the boys in power will have their dollars in US , British pounds and Euros
they are not stupid—just the Barbadian voters and taxpayers who don’t insist on transparency and accountability laws
Allow the Barbados Dollar to float?
Wouldn’t that be copying what the Trinis did, two decades ago?
How un-Barbadian. Can’t do what the Trinis are doing,dammit. That would be sacrilege!
Actually, it’s not a bad idea.
Would soon show us just how desirable our ‘product’ is.
Bet it falls overnight to around 2.50 to 1 USD
and settles(eventually) somewhere just under 3:1
you can bet the boys in power will have their dollars in US , British pounds and Euros
You keep your stash here?
that will be just another way of devaluation of our dollar without doing it in the open just a trick stupid idiots need to go
if it is true, it is a roundabout way to devaluation. the BLP said they would never devalue the Barbados $. Floating the Barbados $ would more than likely reduce the value rather than increase it. another step to making Bajans poorer.
I am not looking to defend a break in the relationship with the dollar but if one looks around the world almost every established country has been fleeing the US dollar or has signal their intention to flee the US dollar as it is facing an unprecedented and historic possibility of a drastic decline in its purchasing power given the high debt load among other things. As we import almost everything we wear, eat and drive in Barbados, the inflation rate will sky-rocket and nobody wants to accepts a US$ that is declining in purchasing power at a fast clip.
If there is a break in ties and the Barbados dollar declines significantly against the US dollar, well God help us as the US dollar is really as bad as it gets at the moment. It has lost over 25% of its purchasing power over the past 5 years. Only the Zimbabwe currency has performed worse over the last few years.
Maybe a tie to the Euro could be considered.
this cannot happen so close to an election
no, not before the election.
That’s the plan AFTER the election
(perhaps regardless of WHO wins/loses)
consider THAT.
the point being that, sooner or later, that artificially/unrealistically-high Bajan Dollar must ‘get real’
NEITHER party wants to have the devaluation necessity on its score card,
but for those who can spell,
Devaluation begins with a D
and Flotation begins with an F,
so no-one can make accusations re. Flotation
(which will amount to the same thing,of course, a rationalisation of our currency)
Maybe the best way to go is U.S.Dollarisation of these islands
Dont you relaise that with the dollar depreciating we have already experienced a devaluation of the currency. Look at what we have to spend to buy a canadian dollar or euro or sterling. We are currency experiencing a significatn increase in imported inflation
Floating the currency will make no sense, as the value will fall against the US$, due to our high level of international debt. As we purchase almost everything from the US, or other countries with currencies linked to the US$ (such as China), our cost of living will skyrocket. We have no natural resources or totally indigenous products from which we could gain by such a devaluation. As “anon” stated above, the decline of the US$ against European currencies will boost our sales in the tourism sector. We don’t need to devalue to reach that market. Our manufacturing sector, which relies on imported inputs, will gain nothing and possibly suffer more as a result. We have all but abandoed sugar, it seems, so agriculture will not gain. Finally, the Brits are buying-up anything with bricks and mortar as it is. Do we want to sell the rest of our land at a knock-down price?
Simply rumours… nothing else..Not in Barbados’ Comparative or Absolute advantage..
rrumours can do alot of damage to a small country!!
These people have squandered away the good of this country to the overseas investors for much of their own gain and are now finding themselves in a pickle and do not know how to recover from the fiasco of CWC etc.
Or the selfinflicted damage done by the likes of Mottley, Lynch Marshall and company, nothing that this gang of crooks will do will surprise me nothing.
BEfore the elections?? No way !
After anything can happen…..
Scotland Yardie says ”Comparative or Absolute advantage..”
Yeah, man. Listen to de economist…
As wunna say, a country needs natural resources and inherent advantage to benefit from cheap currency in grabbing market share.
If there is some truth to this rumour that “inner circles within this BLP government are discussing allowing the Barbados Dollar to float against other currencies on the world market”, then it could be said, quite frankly and from the outset, that they would be wasting their time considering using this worn out and ineffective approach to Barbados placing uniform, consistent and fairly stable money values on the goods and services that are imported into and exported out of the country, as well as on the carrying out of other serious international payment and investment transactions.
Most importantly, our party’s position is that the present fixed exhange rate parity with the US Dollar has long outlived its usefulness as a primary source of stability and certainty for Barbados conducting business within this international trade and currency payments system, since this parity has for a long time, and esp. very recently, been seriously and adversely helping to bring about sustained upward increases in the general price levels in the country, something which this same parity was initially established to do, but which has patently become a failed policy and approach.
The idea of the floating of the Barbados Dollar cannot be properly backed up in Barbados by, and certainly therefore cannot help cause, the existence of certain favourable national conditions to support such a possibility, like a drastically smaller sized government and government expenditures; sustainably strong productive sectors; strongly performing and greatly competitive export sectors; relatively
huge foreign currency reserves; sustained external current account surpluses; and a smaller and reducing national debt.
That the present fixed peg with the US dollar has severely helped to produce the opposite of the above, and other adverse conditions for Barbados, negates the use of the floating of the Barbados Dollar as a viable option since not only does Barbados not have the Barbados currency as an international tradeable curency, but also because whether or not there are these fixed rates, floating rates or managed floating rates of the Barbados Dollar or any other countries’ currencies, there would still be these (for Barbados) inherently negativing parity values, and which are made worse by the actual social, political, material, and financial strengths of big imperialist powers like the US, EU, China. These parity values are seriously controlled by and represent the extent strengths and weaknesses of international trading countries.
Our approach is therefore to totaly minimize the worst overall aspects, for Barbados, of conducting international trade and currency deals in an increasingly volatile global environment, by, whenever we are elected to form the government of this country, Abolishing ALL Exchange Rates with the Barbados Dollar, and in its place allowing for international transactions to be valued and denominated in the particular currencies agreed to between our traders and those traders outside of Barbados, whatever their values are against one another outside of Barbados.
Above poster ”Abolishing ALL Exchange Rates with the Barbados Dollar, and in its place allowing for international transactions to be valued and denominated in the particular currencies agreed to between our traders and those traders outside of Barbados, whatever their values are against one another outside of Barbados.”
Que? So you are going to let the BDS$ float freely, and a further effect of the policy stated is the eventual commercial adoption of the USD.
For those who don’t know – the last time a Minister even joked about devaluation or floating of the Barbados dollar – MILLIONS of dollars were gone from Barbados’ shores (and this was on a Saturday night) the next morning – there is nothing to be gained from floating the dollar unless we have something to export – last I checked we didn’t – and in case anyone hasn’t noticed – the decline of the US dollar has already begun devaluing our dollar (anybody bought Pounds, Euros or Canadian dollars recently) the fact of the matter is – floating is useless and we couldn’t afford to tie our dollar to anything else right now so – what’s a man to do – I suggest becoming accustomed to the taste of breadfruit and pork again – REAL FAST.