ECCB says no plans to change the peg to the US dollar

The Eastern Caribbean Central Bank (ECCB) has reaffirmed its commitment to the EC dollar’s peg to the US dollar, with Governor Timothy N.J. Antoine confirming there are no plans to alter the fixed exchange rate as the bank prepares to mark the 50th anniversary of the arrangement in July, even as global concerns over US economic and political stability continue to weigh on the greenback.

Speaking at the launch of the ECCB’s 2026-2031 Strategic Plan on Tuesday, Antoine told attendees the currency peg remains sound, with the EC dollar’s backing ratio currently approaching 99 percent, well above the legal requirement of 60 percent.

The EC dollar has been pegged to the US dollar since July 7, 1976, at the fixed rate of EC$2.70 to US$1.00.
The currency was initially pegged to the pound sterling when it debuted in October 1965, before the shift to the US dollar was made in 1976.

The reaffirmation comes against a turbulent backdrop for the world’s primary reserve currency.

The US dollar fell roughly 11 percent against a basket of major currencies in the first half of 2025, marking the biggest such decline for a first half of a year since 1973, with economists attributing the slide to uncertainty surrounding the Trump administration’s tariff policy and threats to remove Federal Reserve Chairman Jerome Powell.

The weakness has been largely driven by investor concern over what analysts described as an erratic approach to trade and international diplomacy, fears over the independence of the US Federal Reserve, and significant increases in public spending.

Morgan Stanley Research has estimated the US currency could lose a further 10 percent of its value by the end of 2026.

Antoine acknowledged the global uncertainty during the question-and-answer session at Monday’s launch, telling attendees the bank is monitoring developments closely.

He said the peg has withstood previous shocks and pointed to the near-full backing ratio as evidence of the currency union’s resilience.

A special event to examine the peg’s history and future will be held in July to mark the 50th anniversary of the arrangement, with Deputy Governor Dr. Valda Henry chairing the organising committee.

The Governor has previously noted the value of the EC dollar in terms of parity remains the same today as when the peg was established, and that the stability gives confidence to the people of the currency union while allowing investors to invest, receive returns, and repatriate funds freely.

At the 49th anniversary of the peg last July, Antoine praised the founders’ decision to shift from the pound sterling to the US dollar in 1976, noting the United States had by then become the region’s major trading partner, and said the arrangement has delivered average inflation of between two and three percent over nearly five decades, outside of pandemic-era disruptions.