Economics

What is the Currency of Barbados?

The official currency of Barbados is the Barbadian dollar.

Description

The official currency in Barbados is the Barbadian dollar which has been used since 1935. Presently, its ISO 4217 code is BBD. The abbreviation for the Barbadian Dollar is “$,” or sometimes, to avoid confusion with other currencies having dollar denominations, it is “BDs$.” The subdivision of the Barbadian dollar is 100 cents. According to Standard $ Poor’s, the international rating of the Barbadian dollar on on October 22, 2010 was “BBB-/A-3.”

History of Barbadian dollar

The history of Barbadian dollar goes alongside that of the Eastern Caribbean territories in Britain. The large portion of currency that was circulating during the late nineteenth century was the silver pieces of eight. The silver pieces of eight were initially the Spanish dollars and Mexican dollars. In 1821, there was the adoption of the gold standard in Britain. In 1848, Barbados adopted the British sterling following the imperial order-in-council in 1838. In 1873, there was an international crisis of silver which led to the demonetization of the silver piece of eight that was still circulating alongside the British coins in Barbados. The demonetization took place in 1879, and resulted in the conversion rate of 4 shillings 2 pence a dollar. The first dollar denomination currency in Barbados was the banknotes and was introduced in 1882. The dollar did not have any subdivisions and it circulated alongside the sterling and the 1 pound notes that the government issued in 1917. There were also private notes with sterling denominations which began to circulate from 1920 with the conversion rate of 4 shillings 2 pence a dollar.

The official tie of the Barbados currency with the ones of Eastern Caribbean territories of Britain took place from 1949, following the introduction of the British West Indies dollar. The government of Barbados gave out the paper money dollar denominations between 1938 and 1949. In 1955, there was the introduction of a decimal coinage which replaced the British sterling coinage. There was also a replacement of the British West Indies dollar by the East Caribbean dollar in 1965.

The Central Bank of Barbados created the Barbadian dollar in May 1972. The dollar replaced the East Carribean dollar in 1973 and was pegged to the US dollar from July 5, 1975, with the conversion rate of two Barbados dollar for one US dollar.

Coins of the Barbadian dollar

The first coinage of the Barbadian dollar after the currency’s introduction in 1973 was in the denominations of 1¢ which was struck in bronze until 1991 and copper plated zinc afterward, 5¢ which was struck in brass, 10¢, 25¢, and $1. The 10¢, 25¢, and $1 denominations were struck in cupronickel.

Barbadian Dollar Banknotes

The first banknotes of 5 dollars were introduced in 1882 by the Colonial Bank. Later, in 1920, the bank issued 20 and 100 notes while the Barclays Bank which took over the Colonial Bank introduced the 5, 20 and 100 dollar notes in 1922. However, in 1940, issuance of the 5 dollar notes continued until 1949 while other denominations stopped production. The banknotes that are circulating currently are the 2, 5, 10, 20, 50, and 100 dollar notes.

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