|
After careful deliberation by a
committee, which was formed to
consider the introduction of Cayman
currency to the Islands, it was
recommended that a local currency
would be to the economic and
political advantage of the Cayman
Islands. This recommendation was
accepted by Her Majesty's
Government, in view of the rapid
progress of the Cayman economy.
There was no opposition from the
Bank of Jamaica, who indeed gave the
Board valuable assistance throughout
the transition period. Formal United
Kingdom approval for the issue of a
new and independent currency in the
Cayman Islands was given in
September 1970 and the Currency
Committee was charged with the
responsibility of introducing the
currency and proposing the
appropriate legislation. The Cayman
Islands Currency Board was created
by the Currency Law of 1971 for the
purpose of administering the
physical issue and redemption of
currency. The Law of 1971 allowed
for an expansion in the Board's
function over a period, which
involved, inter alai, the
development of an active investment
policy, including the management of
local assets, and perhaps ultimately
the opening of accounts by the Board
for the local commercial banks to
establish a clearing system. On May
1st 1972 the Cayman Islands Currency
Board commenced operations with the
new issue. By the end of June 1972
J$710,895 (Jamaican dollars) notes
and coins had been redeemed. The
method for withdrawal was very
simple: all Jamaican currency held
by and returned to the banks was
paid over, at frequent intervals, to
Barclays Bank International Limited,
as Agent of the Board in exchange
for an equivalent amount of Cayman
currency. The Bank of Jamaica was
informed of the amounts so withdrawn
and the Currency Board's account
with the Crown Agents in London was
credited with the sterling
counterpart on receipt of sterling
value. It was agreed that the Bank
of Jamaica would redeem at par, and
the sterling counterpart of the
currency issue received in London as
exchange for the Jamaican currency
formed the backing for the new
currency. In order to ensure an
adequate supply of currency during
the changeover period, Jamaican
notes and coins remained legal
tender until 31st August 1972.
(Jamaican dollars). In mid-1972, the
Cayman Islands Government signed an
Agreement with World Coin
Corporation for the issue of various
sets of proof coins. By November
1972, two programmes were arranged
and the coins were issued. The first
programme was the Eight Coin Proof
set and the second programme marked
the silver wedding anniversary of
Her Majesty the Queen. The issuing
of numismatic coin programmes still
continue today.
By the end of 1972 the currency in
circulation amounted to CI$
1,091,975 indicating the success of
the newly introduced currency. On
1st April 1974, the 1971 Currency
Law was replaced by the Currency Law
of 1974. This legislation enabled
the Board to declare the parity of
the Cayman dollar in terms of the US
dollar, resulting in the CI $1 = US
$1.2 relationship that exists today.
A further revision to the Law was
carried out in 1983 when the
Currency Law of 1974 was repealed
and replaced by the Currency Law
Revised. This law has since been
replaced by section 18 of the
Monetary Authority Law. The Currency
Committee which was formed prior to
1971 to consider the introduction of
Cayman currency decided upon a
decimal system of currency
consisting of four notes of $1, $5,
$10, and $25, and four ordinary
circulating coins of the following
denominations - 1 cent, 5 cents, 10
cents and 25 cents. In 1981 the
Board introduced the new
denominational values of $100 and
$40 notes followed by the issue of
the $50 note in 1985. The contracts
for printing the notes and minting
the coins continue to be awarded to
Thomas De La Rue and Company Limited
and The British Royal Mint,
respectively. On the January 1st
1997, the Cayman Islands Monetary
Authority was established as a body
corporate under The Monetary
Authority Law. This Law replaced the
Cayman Islands Currency Law. Under
this Law, the former
responsibilities, duties and
activities of the Financial Services
Supervision Department and the
Cayman Islands Currency Board now
fall to the Authority, which was
created from the merger of these two
bodies. Today, the Cayman Islands
Monetary Authority is the
organization responsible for the
issue and redemption of Cayman
Islands Currency.
TOP 100 CAYMAN ISLANDS ARTICLES ON
THE WEB
|
