What Is the BBD (Barbados Dollar)?
The BBD (Barbados dollar) is the national currency of Barbados. Users of the Barbados dollar sometimes use the symbol “Bds$” to differentiate it from other dollar-denominated currencies, such as those of the United States, Canada, and Australia.
Like the U.S. dollar (USD), the Barbados dollar subdivides into 100 cents.
- The Barbados dollar is the national currency of Barbados.
- It is pegged to the USD at a rate of 2 BBD per USD.
- Today, tourism and offshore tax services are major drivers of the economy of Barbados.
Understanding the Barbados Dollar
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. Sugar cane was introduced in 1640 and became a mainstay of the economy. The labor-intensive crop caused a massive growth in the island's population, many of whom were enslaved plantation workers at that time. The island remained a British possession until its independence in 1966.
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 1972, when it replaced the East Caribbean dollar at a value of one-to-one. This occurred shortly after the establishment of the Central Bank of Barbados, which administers the currency today.
Since 1975, the currency value has been pegged at a rate of 2 BBD per USD. It is circulated in both coin and banknote formats, with the coins minted in denominations of 1 cents, 5 cents, 10 cents, 25 cents, and one dollar, and the banknotes printed in denominations of two, five, 10, 20, 50, and 100 dollars.
Real World Example of the Barbados Dollar
Since the 1970s, the economy of Barbados has been principally known for its tourism, manufacturing, and offshore financing sectors. Today, the service sector holds the largest share of national gross domestic product (GDP) by a wide margin, representing over 80% of the total.
Because it is pegged to the USD at a rate of two-to-one, the value of the Barbados dollar relative to the USD has been highly stable. Likewise, inflation has remained stable at around 5% per year for the past several decades, although more recently it has trended below 3% per year.
Since 2007, Barbados' per-capita GDP, measured based on purchasing power parity (PPP), has grown at a compound annual growth rate (CAGR) of just under 1%. Specifically, it grew from 16,921 in 2007 to 18,534 in 2018.