What Is the Barbados Dollar (BBD)?
The term Barbados dollar (BBD) refers to the official national currency of the island nation of Barbados. The currency is abbreviated as BBD in the foreign exchange market and is represented by the symbol Bds$.
The dollar is issued and maintained by the country's central bank. Banknotes come in values ranging from Bds$ 2 to Bds$100. One dollar is divided into 100 cents. Coins are minted in values of one cent to Bds$1. The BBD is pegged to the United States dollar (USD).
Key Takeaways
- The Barbados dollar is the national currency of the island of Barbados.
- The currency is abbreviated as BBD in the foreign exchange market and is often represented by the symbol Bds$.
- Banknotes range in value from Bds$2 to Bds$100 while coins are minted in five-cent to Bds$1 denominations.
- The BBD is pegged to the U.S. dollar at a rate of Bds$2 BBD per $1.
- Tourism and offshore tax services are major drivers of the economy of Barbados.
Understanding the Barbados Dollar
The Barbados dollar is the currency of Barbados which is an island nation in the Lesser Antilles off the coast of South America. The country's central bank, the Central Bank of Barbados, assumed control of currency production in 1973. The bank, which was established in 1972, is also responsible for the island's financial stability through the implementation of fiscal and monetary policy.
The BBD is commonly represented by the symbol Bds$ to differentiate it from other dollar-denominated currencies, such as those of the United States, Canada, and Australia. Banknotes are printed in the following denominations: Bds$2, Bds$5, Bds$10, Bds$20, Bds$50, and Bds$100. The country's coins are produced in five-, 10-, and 25-cent denominations and Bds$1.
Barbados' central bank is releasing a new series of notes in December 2022. This upgrade features polymer bills that are designed with new security features. The aim is to modernize the country's currency while keeping ahead of counterfeiters.
U.S. dollars are often accepted in Barbados. The BBD has been pegged to the U.S. dollar since 1975 at a rate of Bds$2 BBD to $1. This rate remains even today. This gives the central bank some degree of stability, as it allows the government to make long-term plans.
Barbados withdrew its one-cent coin from circulation in May 2014 due to the high cost of production and the low cost of redemption.
History of the Barbados Dollar (BBD)
Barbados is an island nation in the Lesser Antilles off the coast of South America. Both the Spanish and the Portuguese laid claim to the island during their periods of colonial expansion, but it was the British who would later establish a colony there in 1627.
In 1882, the first dollar-denominated currency was issued by private banks. Along with British pounds (GBP), these new banknotes formed the nation's legal tender. The last of these private banknotes were issued in 1949, after which time the role of distributing and maintaining the national currency was reserved by the government.
The current Barbados dollar began circulation in 1973 when it replaced the East Caribbean dollar (XCD) at a value of one-to-one. This occurred shortly after the establishment of the Central Bank of Barbados.
The Economy of Barbados
Sugar cane was introduced to Barbados in the 1630s and became a mainstay of the economy as a reliable cash crop. The labor-intensive cultivation caused massive population growth. which included many enslaved plantation workers. The island remained a British possession until its independence in 1966.
Since the 1970s, the country's economy has principally been known for its tourism, manufacturing, and offshore financing sectors. The service sector represents over 71% of the total gross domestic product (GDP). The country's GDP in 2021 was $4.9 billion. The country's economy grew by 1.4% and the inflation rate was 4.1% that same year.
The island nation joined the World Trade Organization (WTO) in January 1995. Since then, offshore tax services became a growing driver of its economy. In fact, by the late 1990s, this new sector had eclipsed sugar production, the traditional bedrock industry of the island.
