Haiti - Money

Following a period of U.S. occupation (1915-34), Haiti's currency, the gourde, was tied at a rate of 5 to the U.S. dollar. Dollars have always circulated freely in Haiti and are often preferred by retailers and others to the local

currency. In 1991, the Aristide administration finally severed the official exchange rate and let the gourde float. It fell from 7.5 to the dollar in 1991 to 16.2 in 1995 and 22.5 in 2000. This means that the cost of many basic imported goods has risen dramatically for Haiti's poorest sectors.

Haiti experienced high levels of inflation during the embargo of the early 1990s, reaching 39.3 percent in 1994. This rate was reduced to 15.4 percent in 1998 and has remained stable since. Growth in the GDP has been modest in recent years. In 1995, in the wake of Aristide's return and an influx of foreign aid, the GDP grew by 4.4 percent, but this fell to 2.7 percent in 1996 and then contracted by 0.9 percent the following year. The GDP growth in 1999 was estimated at 2.4 percent.

The Banque de la République d'Haïti is the country's central bank. It issues currency and holds the government reserves. There are 9 commercial banks, as well as U.S., Canadian, and French banks. Most Haitians, however, never use a bank, dealing only in cash and investing their savings in a tangible asset.