John A Rolle: The foreign exchange constraint on monetary policy - the Bahamian context

Remarks by Mr John A Rolle, Governor of the Central Bank of The Bahamas, at the Forum on the Past, Present and Future of Monetary and Fiscal Policy, Nassau, 20 November 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good evening.

It is a pleasure for me to bring opening remarks for this distinguished panel of past Central Bank Governors, all of whom I know and have worked with in some professional capacity. The common theme in these professional encounters was the appreciation of the scope for which monetary policy could be effective in either a Bahamian or Caribbean setting; what contributed to making policy effective; and the understanding of what constrained policy makers.

In The Bahamas, we have a commitment to maintain a fixed exchange rate, at one to one against the US dollar. The exchange rate peg is supported by the foreign reserves of the Central Bank.