ECCB keeps EC dollar peg and boosts food security funding

Eastern Caribbean leaders reaffirmed support for the EC dollar’s fixed exchange rate at the ECCB’s 113th Monetary Council meeting on July 10 in Dominica. The council also approved an additional EC$25 million grant for food and nutrition security and outlined new steps on payments, financial regulation and regional competitiveness.

Why it matters: - The Eastern Caribbean Currency Union is leaning on monetary stability, regional coordination and targeted investment to protect growth as global uncertainty, inflation pressure and high energy costs weigh on the outlook. - The EC dollar’s fixed exchange rate remains the anchor for confidence, reserves and policy credibility across the union. - The council’s decisions affect banking rules, payment systems, food security funding and the region’s push for stronger competitiveness.

What happened: - The Monetary Council of the Eastern Caribbean Central Bank met on 10 July 2026 at the InterContinental Dominica Cabrits Resort. - Dr Irving McIntyre, Dominica’s finance minister, chaired the 113th meeting. - The council reaffirmed support for the EC dollar and the ECCB’s Strategic Plan 2026-31, “The Big Push: Collective Action for Shared Prosperity in the ECCU.” - The council also set the date for its 114th meeting for 30 October 2026 by videoconference from ECCB headquarters in Saint Christopher (St Kitts) and Nevis.

The details: - The EC dollar’s fixed exchange rate remains EC$2.70 to US$1.00. - The reserve backing ratio stood at 97.6 per cent, with foreign reserves of EC$5.9 billion. - The ECCB Agreement requires reserves equal to at least 60.0 per cent of currency in circulation and other demand liabilities, so the current reserve backing ratio remains well above the statutory floor. - The council agreed to keep the Minimum Savings Rate at 2.0 per cent. - The council also kept the Discount Rate at 3.0 per cent for short-term borrowing and 4.5 per cent for long-term borrowing. - The council approved an additional EC$25 million grant to support member governments’ food and nutrition security efforts. - That new grant builds on an EC$25 million grant approved in February 2025. - The council said the extra funding is meant to reduce import dependence and strengthen resilience across the ECCU. - The ECCU banking sector continues to show resilience, supported by strong liquidity, higher capital adequacy and lower non-performing loans. - The ECCU Credit Bureau has onboarded 25 of 30 Licensed Financial Institutions, or 83.0 per cent, and 13 of 49 Credit Unions, or 27.0 per cent. - The council said full participation is essential for the credit bureau to provide comprehensive and reliable credit information. - The Office of Financial Conduct is scheduled to start operations in September 2026. - Stakeholder consultations with the Bankers’ Association and Licensed Financial Institutions are still underway before launch. - At least 17 Licensed Financial Institutions now offer the ECCU First Step Savings Account. - The council reviewed two payments initiatives under The Big Push: the CARICOM Payments and Settlement System pilot and the Fast Payment System. - CAPSS is designed to enable instant cross-border payments in local currencies and reduce transaction costs and reliance on correspondent banking. - The Fast Payment System is designed to allow real-time, 24/7 electronic payments across the ECCU. - The council said retail bond issuances can widen access to investment opportunities and support financial inclusion and wealth creation. - The Eastern Caribbean Citizenship by Investment Regulatory Authority remains on track to launch in September 2026. - The council said ECCIRA is meant to strengthen governance, transparency, integrity and regulatory oversight of citizenship-by-investment programmes. - The council noted that member governments have used fiscal measures to cushion households and businesses from higher living costs. - The council said fiscal sustainability depends on stronger domestic revenue mobilisation and responsible expenditure growth. - Any support for vulnerable households should be targeted, fiscally sustainable and temporary, with a clear sunset clause. - Tourism remained strong despite global uncertainty. - Visitor arrivals rose 9.0 per cent, from 2.3 million in the first quarter of 2025 to 2.5 million in the first quarter of 2026. - Visitor spending increased 4.0 per cent, from EC$2.7 billion to EC$2.8 billion over the same period. - The council said weak air connectivity and high transportation costs continue to limit intraregional travel. - The council welcomed continued discussions on OECS Air, a proposed regional airline.

Between the lines: - The ECCB is signaling that reserve strength alone is not enough; the region also needs disciplined fiscal policy, deeper integration and faster execution on energy and payments reform. - The food security grant and renewable energy push suggest the council sees economic resilience as a practical issue, not just a macroeconomic one. - The credit bureau, financial conduct office and citizenship-by-investment regulator point to a broader effort to tighten oversight and modernize institutions at the same time. - The tourism data show the region still has demand on its side, but connectivity and transport costs could limit how much of that demand turns into broader growth.

What's next: - ECCIRA is expected to launch in September 2026. - The Office of Financial Conduct is scheduled to begin operations in September 2026. - The ECCB will continue work on the credit bureau, payments modernization and renewable energy financing, including the Caribbean Resilient Renewable Energy Infrastructure Investment Facility. - The Monetary Council will meet again on 30 October 2026.

The bottom line: - The ECCB is keeping policy steady while pushing member states to move faster on resilience, integration and institution-building.