Country Listing

Haiti Table of Contents


Monetary and Exchange-Rate Policies

The Bank of the Republic of Haiti (Banque de la République d'Haiti--BRH) represented one of the few well-established, public-sector institutions dedicated to economic management. Founded in 1880 as the National Bank of Haiti, the BRH--a commercial bank--did not begin to act as a central bank until 1934, when it became known as the National Republic Bank of Haiti. Since the 1930s, the bank has performed the functions of a central bank, a commercial bank, and a development-finance institution; it also has been involved in other matters, such as the management of the Port-au-Prince wharf. As a central bank, the BRH also issued Haiti's national currency, the gourde (G--for value of gourde--see Glossary).

On August 17, 1979, new banking laws gave the BRH its present name and empowered it with the monetary-management responsibilities associated with most central banks. The BRH subsequently became actively involved in controlling credit, setting interest rates, assessing reserve ratios, and restraining inflation. In the late 1980s, the BRH pursued generally conservative monetary policies, and it employed high cash-reserve ratios in commercial banks as the key policy tool to regulate the money supply. In an effort to increase the dynamism of the economy, the BRH sought to inject more credit into the private sector, particularly for long-term uses.

Since 1919 the Haitian currency has been pegged to the United States currency at the rate of five gourdes to the dollar. Since that same date, the United States dollar has served as legal tender on the island and has circulated freely. Remarkably, the value of Haiti's fixed exchange rate remained strong for decades; it fluctuated only with the movements of the currency of the United States, its main trading partner. Until the 1980s, no black market existed for gourdes, but unusually high inflation and large budget deficits eroded their value and brought premiums of up to 25 percent for black-market transactions in the early 1980s. The black market subsided considerably in the late 1980s, but the gourde's real rate of exchange remained above the 1980 level.

Data as of December 1989