Both Sides of The Coin: The Story of The Central Bank of Barbados 1972-2017

54 pegged to the US dollar. The Eastern Caribbean, Guyana and Trinidad and Tobago currencies, which were still linked to sterling, began to float against the Barbados dollar, with rates for these currencies being fixed on a daily basis, using the Barbados dollar/sterling base rate 31 . The immediate result of the link to the US dollar was a fall in the foreign exchange reserves. After Barrow’s announcement on May 30 of the intention to implement this arrangement, businessmen estimated that there would be a revaluation of the Barbados dollar and had postponed payments on foreign liabilities. 32 That action, together with high earnings from exports of sugar, led to a sharp rise in foreign assets during June and the largest recorded increase in foreign reserves for the April to June quarter up to that time. However, between July 5, when the parity was changed, and the end of that month, foreign reserves declined, as the liquidation of foreign liabilities resumed.