Despite being a relatively small country, Bermuda accounts for a fair amount of money flowing in and out of its shores. In 2016, more than U.S. $1.03 billion was sent from the United States to Bermuda in the form of remittances. Around U.S. $7 million was sent in the opposite direction in the same year. In 2017, bilateral trade of goods between both regions exceeded U.S. $727 billion.
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In 1792, the United States adopted the U.S. dollar as its official currency. Outside of the country, the use of the U.S. dollar as legal tender is also prevalent in two British Overseas Territories, the Caribbean, Ecuador, El Salvador, Turks and Caicos Islands, the British Virgin Islands, the Federated States of Micronesia, and Zimbabwe.
Some of the places where it is used unofficially include Myanmar, Cambodia, Nepal, Haiti, Costa Rica, Liberia, and Belize.
In April 2016, the share of the U.S. dollar in the global forex market turnover was more than 87%. It remains the world’s most heavily currency as well as the most preferred reserve currency. Forex market estimates suggest that over U.S. $5 trillion is traded every day.
|Nicknames||Buck, moolah, paper, dough, dead presidents, |
bones, greenback, green
|Bank notes||$1, $2, $5, $10, $20, $50, $100|
|Coins||1c, 5c, 10c, 25c, 50c, $1|
The pound sterling became the official currency of Bermuda in 1842. It remained in circulation until 1972. Bermuda was compelled to come up with its own currency because of the possible devaluation of the pound sterling as well as the common use of U.S. and Canadian dollars in the country. It introduced the decimalized Bermudian dollar on 6 February 1970.
Trading of the Bermudian dollar outside of the country is rather uncommon. Bermuda does not have capital or foreign exchange controls, giving you the ability to trade any amount of Bermudian dollars for a foreign currency, or vice-versa. The use of U.S. dollars in Bermuda is fairly common.
|Currency symbol||$, BD$|
|Bank notes||$2, $5, $10, $20, $50, $100|
|Coins||1, 5, 10, 25, 50 cents, $1, $5|
U.S. Dollar / Bermudian Dollar Historical Rates
While Bermuda introduced its own currency in 1970, it was pegged to the pound sterling. The sterling era ended in 1972, after which the Bermudian dollar was pegged to the U.S. dollar at par. Bermuda’s decision to peg its currency to the U.S. dollar was made keeping in mind the inflow of tourists and business investments from North America.
Since then, the law in Bermuda requires that if local businesses accept payments in U.S. dollars, they must be accepted at the rate of U.S. $1 = BD$1. Given the peg between both currencies, the USD/BMD market rate experiences little to no fluctuation.
USD/BMD in the last five years
|U.S. $1 =|
|1 July, 2013||BD$0.9991|
|1 July, 2014||BD$0.9993|
|1 July, 2015||BD$0.9999|
|1 July, 2016||BD$0.9999|
|1 July, 2017||BD$0.9998|
USD/BMD in the last five months
|U.S. $1 =|
|1 June, 2018||BD$0.9725|
|1 July, 2018||BD$0.9673|
|1 August, 2018||BD$0.9569|
|1 September, 2018||BD$0.9490|
|1 October, 2018||BD$0.9621|
What Affects USD/BMD Rates?
The at par peg between the Bermudian dollar and the U.S. dollar that has been in place since 1972 is likely to remain the same for some time. The Bermuda Monetary Authority allows the legal exchange of Bermudian dollars for other currencies only through banks. While the USD/BMD exchange rate in such scenarios essentially remains the same, these transactions are usually subject to a foreign currency purchase tax of one percent. Some banks are also known to charge additional exchange fees.
The Bermuda Monetary Authority might think about doing away with the peg or revising it if the U.S. dollar devalues significantly, or if there is a noticeable decline in its dependence on the United States for tourism and investment.
Given the peg that connects the Bermudian dollar and the U.S. dollar, sending money from Bermuda to the U.S. or the other way around requires that you look beyond the USD/BMD exchange rate on offer. Bear in mind that the fees you need to pay might affect the cost of your transfer, and aspects such as payment and transfer methods also need your attention.