Caribbean Currency Guide: Explaining the Barbados Dollar

January 19th, 2023

If you're planning a Caribbean vacation, brushing up on the local currencies would be a wise move. After all, a little preparation can go a long way regarding money matters. And if your destination is Barbados, then look no further—we've got the inside scoop on the Barbados dollar.

A visit to Barbados promises warm weather and even warmer people—as well as an exciting new currency experience. By familiarizing yourself with the basics of using BBD – the Barbados currency now, you'll be able to relax and enjoy your trip without worrying about money once you arrive on this beautiful Caribbean island paradise!

This guide will cover everything you need to know about the Barbados dollar, so you can make informed decisions when it comes time to part with your hard-earned cash. Let’s dive right in!

Barbados Money 101: What Is the Currency in Barbados?

Many people wonder: “What currency does Barbados use?” or “What are Barbados dollars called?” The official Barbados currency is the Barbados Dollar (or BBD for short). Also known as Bajan or BDS, Barbadian dollars are issued by the Central Bank of Barbados and used throughout the island nation.

The Barbados dollar also has coins in denominations of 1, 5, 10, 25, and 50 cents, as well as 1 and 2 BBD. However, remember that some establishments may not accept coins as payment and prefer paper money instead.

BBD Meaning Vs. BDS Meaning: What’s the Difference?

BBD and BDS are acronyms that often leave people confused when talking about Barbados money. BBD is the abbreviation for Barbados currency – the Barbados Dollar in the foreign exchange market. BDS also stands for Barbados dollars – it’s simply a slightly different abbreviation. Although BBD is the more common one, both can be used interchangeably.

History of the Barbados Dollar: A Quick Recap 

The roots of the Barbados dollar go all the way back to 1627, when it was first introduced as a form of currency on the island. Since then, it has gone through several iterations and re-evaluations to keep up with inflation and other economic factors. The current version of the Barbados dollar was adopted in 1975 when it became part of the Eastern Caribbean Currency Union alongside five other countries in the region.

Today, Barbadian dollars are one of the most widely used currencies in all of the Caribbean nations. It's accepted everywhere – from supermarkets and gas stations to large-scale banks and international businesses. And, while many Caribbean countries are now turning to cryptocurrencies such as Bitcoin (just like the rest of the world), cash is still king when it comes to paying for goods and services in Barbados. 

Explaining the Barbados Exchange Rate: Barbados Dollar to USD

Barbados exchange rate is specific in that the Barbados currency is fixed instead of floating. Floating currencies are not tied to the value of another country's currency, meaning the exchange rate can fluctuate daily. On the other hand, a fixed currency exchange rate is when a country's currency is tied to the value of another country's currency, typically one with a stable economy.

But is Barbados dollar the same as US dollar? No. The Barbados dollar (BBD) is linked to the US dollar at a fixed exchange rate of 2:1. The BBD has been pegged to the US dollar since 1975 at a rate of 2 BBD (1.98 BBD, to be exact) to $1, and it doesn’t fluctuate. This means that one US dollar is equal to roughly two Barbadian dollars, and one Barbados dollar always equals 0.5000 US dollars.

For example, how much is $100 US in Barbados? 100 USD = 201.91000 BBD. Thanks to the peg, converting the Barbados dollar to USD is very simple! Many countries in the region, such as The Bahamas, Belize, and others using the Eastern Caribbean dollar, also have fixed exchange rates.

Although the Barbados exchange rate (USD to BBD) doesn’t fluctuate, you can always take a look at our exchange rates for up-to-date information. You can use (and customize) our exchange rate alerts to monitor the buy and sell rates for the BBD and any other currency we offer, as well as the dollar-denominated spot rate.

Why Does Barbados Set a Constant Currency Rate with US dollars?

Barbados has set a constant currency rate with the US dollar as part of its monetary policy. This policy was adopted for several reasons:

·       To promote stability: A fixed exchange rate can provide a sense of predictability and stability for businesses, investors, and consumers, as they know that the value of the currency will not fluctuate wildly.

·       To control inflation: Tying the value of the Barbados dollar to the US dollar can help to control inflation by limiting the amount of money in circulation.

·       To attract investment: A fixed exchange rate can make a country more attractive to foreign investors by providing a stable environment for investment.

·       To align with trading partners: Barbados has a strong economic relationship with the United States, which means that a fixed exchange rate with the stable US dollar aligns well with its main trading partner.

It's worth noting that having a fixed exchange rate also has its own set of challenges, such as loss of monetary policy independence, lack of adjustment mechanisms in case of economic shocks, and may lead to a misalignment of the exchange rate, which may harm the economy.

Can Barbados Dollar Be Devalued?

A currency peg can be broken or devalued if the central bank decides to change the exchange rate or if economic conditions make it difficult for the central bank to maintain the peg.

For example, if Barbados were to experience a large trade deficit, a significant loss of foreign reserves, or high inflation, the central bank may decide to devalue the Barbados dollar to make its exports more competitive and address the economic issues. Sometimes, a country may also decide to change the peg to another currency as a monetary policy or to a basket of currencies.

Understanding Barbados Money: BBD Traveling Tips

When exchanging money into or out of Barbadian dollars, there are a few key things you should consider. First, be aware that exchange rates can fluctuate significantly depending on where you are exchanging your money. Second, some types of foreign currency may not be accepted at certain establishments. Many businesses will accept US dollars as a form of payment, but it's always a good idea to check first.

You can use the Barbados dollar basically anywhere you'd use any other currency—for paying for goods and services, cashing checks, and making withdrawals at banks and ATMs across the island nation. You will also find plenty of places where you can exchange your foreign currency into Bajan dollars; these include airports, hotels, and tourist centers, although they usually charge larger fees, so it’s advised to come prepared.

When traveling to Barbados, it's always a good idea to carry some cash with you. Although credit cards are widely accepted, there’s usually an extra charge for using them, and many shops offer discounts for cash purchases. So be sure to ask before swiping! As for ATMs, they can be found throughout most of the island, but they also tend to have high withdrawal fees, so it's best to have cash on you or take out larger sums of money at once rather than several small withdrawals.

Is It Better to Use US Dollars or Barbados Dollars in Barbados?

It depends on the individual situation and what is most convenient for the person. Since the value of the Barbados dollar is tied to the US dollar, the exchange rate between the two currencies is fixed. Prices for goods and services in Barbados are often quoted in both US dollars and Barbados dollars.

If you’re traveling to Barbados and have US dollars, you may find that it is more convenient to use them, but it might also be beneficial to have some Barbados dollars on hand for smaller purchases or for places that do not accept US dollars. 

Most larger shops and restaurants in Barbados are happy to accept US dollars and BBD, but you'll always get more for your money when paying in Barbadian dollars. You’ll also receive any change in BBD, not USD, meaning you’ll have to convert the leftover Barbados currency to USD back home. 

Tipping Culture in Barbados

Tipping isn't mandatory in Barbados but is appreciated by service workers who often rely on tips as a form of income. Generally speaking, 15% is considered an acceptable tip amount for restaurants, while taxi drivers expect around 10%.

If someone helps you carry your luggage or goes above and beyond during your stay, feel free to show your appreciation. Keep in mind that some establishments may add a service charge to your bill, so always check before tipping twice! 

Where Can You Exchange Barbados Currency?

Do yourself a favor — brush up on your knowledge of Bajan money before setting off on your next adventure and always make sure that you have enough local currency on hand before traveling around Barbados. Since airport kiosks, ATMs, and banks tend to charge hefty fees, using a registered money changer like US First Exchange is the easiest way to purchase and sell foreign currency online.

You can order foreign currency online and have your Barbados money shipped & delivered straight to your doorstep as fast as 24-48 hours, fully insured. Have peace of mind knowing your transactions are secure and safe – besides being registered with the US Treasury as a Money Services Business (view a copy of our registration), we also hold multiple state-specific licenses as a money services business and, where required, are bonded as well.

Now all that's left is for us to say bon voyage and have an amazing time!

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