Appendix 8. Status of the Key Free Movement Components in Member States as at March 14, 2006

• Author: UWI-CARICOM Project
• Pages: 222-230

222CSME: Challenges, Benefits, Prospects

Appendix 8 - STATUS OF THE KEY FREE MOVEMENT

COMPONENTS IN MEMBER STATES as at March 14, 2006

POLICY

INSTRUMENT STATUS REPORT

Enhanced Monetary

Cooperation/

Monetary Union

1. Currency

Convertibility

Process set in train in 1996. Only fixed

exchange rate currencies of Barbados and

OECS accepted by financial intermediaries and

large business establishments. The main

constraint is the reluctance of commercial

banks to conduct transactions using the

floating exchange rate currencies, even at a

discount for risk.

With greater success in attaining the

convergence target for floating exchange rate

stability, renewed efforts at marketing

currency convertibility could commence after

the 30 June 2006 full establishment of the

CARICOM Single Market.

2. Exchange Control The floating exchange rate currencies have for

some time operated without nominal exchange

control (although a managed float is

sometimes practiced). The OECS countries

also maintain that their foreign exchange

system is fully liberalized. Only Barbados and

Belize currently practice exchange control with

respect to all, including intra-CARICOM,

transactions.

Barbados will review the situation at the end

of the 2007 World Cup Cricket competition

when foreign exchange demands would have

subsided, but Intra-CARICOM interest rate

differentials will also be a consideration.

Belize, owing to the difficult current macro-

economic situation, will wait until 2007 to

decide whether to engage in further

liberalization.

3. Single Currency A Summary Report submitted to the COFAP

by the Committee of Central Bank Governors

indicates the readiness of Member States as

follows: