Eastern Caribbean Currency Union: Selected Issues

Author: International Monetary Fund

Volume/Issue: Volume 2008 Issue 096

Publication date: March 2008

ISBN: 9781451811728

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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Banks and Banking , Exports and Imports , Finance , Public Finance , ISCR , CR , ECCU , exchange rate , tax , liquidity assistance , tourism flow , CIT rate , banking crisis , ECCU emigration rate , Real exchange rates , Corporate income tax , Liquidity , Tourism , Banking crises , Caribbean , Global

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Republic of Congo : 2001 Article IV

Summary

This paper assesses the evolution of Eastern Caribbean Currency Union (ECCU) real exchange rates over time, and examines whether the region has lost competitiveness. The main finding is that there is little evidence of overvaluation of the Eastern Caribbean (EC) dollar. The relationship summarized above permits the calculation of equilibrium current account balances or norms. The financing of ECCU current account imbalances appears stable. This paper also provides evidence on the distinctive impact that tourism plays in the determination of the real exchange rate in tourism-driven economies.