DEFINITION of 'BSD (Bahamian Dollar)'
The currency abbreviation or currency symbol for the Bahamian dollar (BSD), the currency of the Bahamas. The Bahamian dollar is made up of 100 cents, and is often presented with the dollar sign as B$ to allow it to be distinguished from other currencies denominated in dollars, such as the U.S. dollar (USD). BSD is pegged to the U.S. dollar at parity; as a result, businesses in the Bahamas accept either currency.
BREAKING DOWN 'BSD (Bahamian Dollar)'
The Bahamian dollar replaced the British pound in 1966 at a rate of 7 shillings to 1 Bahamanian dollar. This rate was established based on parity with the U.S. dollar because the fixed exchange rate of the GBP/USD was 1 pound = 2.8 U.S. dollars. Due to this parity, the Bahamas operates under what is known as a bimonetary system, in which both the Bahamian dollar and the U.S. dollar are national currencies.