BASSETERRE, ST. KITTS, MAY 30TH 2013 (CUOPM) – The St. Kitts-based Eastern Caribbean Central Bank (ECCB) has rejected a suggestion by international ratings agency Moody’s Investor Services that the EC dollar should be devalued within the next five years.
Moody’s had recommended that Caribbean territories devalue the currency or adopt the US dollar in an effort to address what it described as a “debt crisis” in the region.
However, ECCB Managing Director, Mrs. Jennifer Nero said devaluation is not on the cards and that there has been “substantial analysis” done on the matter of the value of the EC dollar.
“It’s under watch all the time, but as of this point in time there is no real reason for that (devaluation) at all,” she said in a radio interview. “The currency has been within the acceptable bands, coming and going. The volatility is within range,” Nero said.
Asked whether the EC dollar was likely to be devalued within the next five years, Nero responded: “Well what we can say, we at this particular point in time, we don’t see that.”
The idea of a devaluation has also been dismissed by president of the Institute of Chartered Accountants of the Eastern Caribbean, Frank Myers. He said devaluation of the EC dollar won’t benefit the region such a move could enhance the region’s competitiveness.
“This is a conversation we should really stay away from, really there is no reason for us to be going in that direction,” Myers said. “It’s not going to benefit us because of the makeup of our economy, we are not very export-oriented in terms of hard goods … given that tourism is our main product, I don’t see any benefits in it.”
Myers expressed confidence in the Eastern Caribbean Central Bank’s handling of the dollar. In a recently published report, Moody’s said currency devaluation and dissolution of the Eastern Caribbean Currency Union (ECCU) could enhance the region’s competitiveness.