Exchange rate regimes in the Caribbean

This document analyses exchange rate regimes in the Caribbean subregion. Caribbean
exchange rate regimes are typified into hard and soft pegs. Hard pegs refer to those
arrangements that maintain a constant value of the domestic currency in terms of the
currency of a major trading partner. The Organisation of Eastern Caribbean States (OECS);
economies established a monetary union in 1983. The Bahamas, Belize and Barbados also
fixed the value of their domestic currency in relation to the United States dollar in the
middle of the 1970s. Soft pegs are monetary arrangements characterized by a forcefully
managed exchange rate. Three countries are included in this category, Guyana, Jamaica and
Trinidad and Tobago