Caribbean Central Bank Governors agree to NEW Trade Regime for ease of doing business

Garfield Ekon

Staff Writer

#TurksandCaicos, June 18, 2024 – Regional Central Bank Governors have agreed to implement a system that allows countries in the Caribbean to trade using each other’s currencies without a third-party currency.

Making the disclosure, Governor of the Barbados Central Bank, Kevin Greenidge who is also the Chairman of the CARICOM Central Bank Governors, said it will be a version of the Pan-African Payment and Settlement System (PAPSS) which was launched by the African Export-Import Bank (Afreximbank) in January 2022 to reduce reliance on hard currencies like the US dollar for transactions between African nations.

Once it is replicated in the Caribbean, the system could allow goods and services to be paid for directly in the currencies of the respective CARICOM nations involved, rather than being settled in a third currency like the US dollar, arguing thatg the payment system would reduce transaction costs, minimise the need for holding substantial foreign currency reserves, facilitate smoother intra-regional trade and lead to lower retail prices for consumers.

Noting that the decision was unanimous, Mr. Greenidge said “we just had a meeting in May, and we agreed to push ahead with the pilot programme and we have a technical team working out some of the kinks, how to move ahead with the programme. We are approaching that as soon as possible,” he said while addressing the recent AfriCaribbean Trade and Investment Forum (ACTIF2024), at the Baha Mar Convention Centre in Nassau, Bahamas.

The Central banker who once served as the senior economist who supervised Barbados’ economic restructuring programme for the International Monetary Fund, before taking up the Governor’s job in March 2023, argued that “If we get with one voice and start to speak to these things, call for reforming the way the rating agencies view and assess our position, including debt, we will then make a difference,” he told his audience.

Adding further, he said the region can get where it wants on its own, as he urged both regions to speak with one voice on reforming global financial architecture, while accusing credit rating agencies of bias against small economies.

Speaking with one voice in the Caribbean, in support like the Bridgetown Initiative, Mr. Greenidge believes “we can make a difference.” The Bridgetown Initiative calls for reform of multilateral development banks and international financial institutions to better support climate-vulnerable countries.

“The more we can achieve partnerships around the world, the better we are regarding financing and investment in Barbados and providing the necessary diverse products to do the financing we need. Naturally, the African continent would be a partnership,” he said