Barbados - Money

Regular economic growth and low inflation marked most of the 1990s for Barbados, but by the end of the decade there were anxieties over another possible recession. Consumption of imported goods was too high in relation to export earnings, and credit was too easily available to consumers; therefore, in 1999, the government raised interest rates in an attempt to restrain spending. The Barbadian dollar, which has long been pegged to the U.S. dollar at a rate of BDS$2.000:US$1, is probably overvalued, but it would be extremely difficult for any government to devalue the currency, as so many basic items are imported from the United States.

There is a small local securities exchange, the Securities Exchange of Barbados, founded in 1991, which had a market capitalization of US$2 billion at the end of 1999. Most larger local companies are listed for share trading, together with several companies from Trinidad & Tobago and Jamaica.

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