CARICOM Pilot Of Shared Currency System ‘Soon’

by Dawne Parris The pilot of a potentially ground-breaking scheme to allow CARICOM nations to trade using each other’s currencies without a third-party currency is to start “soon”, Central Bank of Barbados governor Kevin Greenidge has revealed. Greenidge, who chairs the CARICOM group of central bank governors, said regional governors agreed last month to push ahead with a Caribbean 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. If successfully 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. Proponents argue 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. In October, 11 CARICOM central bankers unanimously agreed to adopt PAPSS as the preferred system for settling intra-regional trade transactions. “We just had a meeting in May and we agreed to push ahead with the pilot...