The Commonwealth of Dominica is a Caribbean island country located in the lesser Antilles archipelago. The island occupies an area of 290 square miles. Dominica has a developing economy and uses the eastern Caribbean dollar as its official currency. The currency is also shared with Saint Lucia, Antigua and Barbuda, Montserrat, Saint Vincent and the Grenadines, Saint Kitts and Nevis, Grenada and Anguilla, and all are members of the Eastern Caribbean Currency Union.
The Eastern Caribbean Dollar
The eastern Caribbean dollar is the official legal tender of the Commonwealth of Dominica. Other seven members who form the Organization of eastern Caribbean states also share the currency. Dominica adopted the currency in 1965. The currency has the abbreviation XCD and the symbols $ or EC$. One eastern Caribbean dollar has 100 subunits (cents) and comes in both coin and banknote form. Banknotes come in denominations of 5, 10, 20, 50, and 100-dollar notes with the coins in denominations of 5, 10, and 25 cents and 1 and 2 dollars. The Eastern Caribbean Central Bank has the responsibility of issuing the currency to all of its users. The bank first issued the EC$ in bank notes until 1981 when the first coins were circulated. Since Dominica is a member of the Commonwealth of Nations, its currency has the imprint of Queen Elizabeth II who is the head of the Commonwealth. The Eastern Caribbean dollar exchanges at a rate of US$1 to EC$2.70; a rate that has been fixed since 1976.
Other Currencies and Exchange Rates
While the eastern Caribbean dollar is Dominica’s official currency, other foreign currencies including the euro, the British pound and the US dollar are also accepted as legal tender. The currency has a fixed rate with the US dollar of 1US$:1XCD. The eastern Caribbean dollar exchanges with the euro at a rate of 1EUR:3.14896XCD and with the British pound at a rate of 1GBP:3.50845.
The use of currency in Dominica can be traced back to the occupation of the Europeans in the eastern Caribbean as early as 1704. Most of the currencies previously used in Dominica were shared among the eastern Caribbean colonies of the British. Some of these currencies include the Spanish and the Mexican dollar. Afterward, the British Sterling was introduced in 1825 through a royal edict. In 1949, the British government introduced the British West Indies dollar as the official currency in its colonies. The dollar exchanged at a rate of one dollar for every 4 shillings and two pence. The British West Indies dollar was introduced into the colonial territories of British West Indies as an official legal tender in 1949, fourteen years after the first issue. The currency, abbreviated as BWI$, was introduced with the aim of introducing a common currency within the British West Indies colonies. The BWI$ existed as bank notes until 1955 when the first coins were issued, replacing the British sterling coins. The British Caribbean Currency Board dealt with the supply and stability of the currency. While the currency eastern Caribbean dollar replaced the BWI$ in 1965, the coins of the dollar continued circulating until they were replaced in 1981, making the BWI$ fully defunct.