Barbados will not devalue currency

Barbados and its citizens do not want a devaluation of their currency and Governor of the Central Bank of Barbados, Dr DeLisle Worrell has delivered that blunt message to international rating agencies and the International Monetary Fund (IMF).

However, neither the ratings agencies nor the IMF had asked Barbados to devalue its currency which has been pegged to the United States dollar at 2:1 since 1973.

Barbados initially rejected this as an option in the face of the foreign currency crisis of 1991.

Worrell revealed that devaluation was still among the first prescriptions from many economists in rating agencies such as Moody’s and Standard & Poor’s (S&P) and the IMF.

“Every citizen of Barbados understands the importance of protecting our dollar. Barbados has been able to do so by containing demand for foreign currency within the limits of foreign inflows and investment earnings. It is for that reason that the recent budget could not be more expansionary,” Dr. Worrell explained.

Worrell indicated that the reserves would not fall even lower through the remainder of the year because of the fiscal management. The fiscal strategy is motivated by the need to protect the reserves. Barbados, would not incur more debt to boost reserves.

Barbados continues to enjoy a relatively stable economy, analyst indicate that a devaluation of its currency would not boost the economy, rather, it would the economy.