Located in the North Atlantic ocean, Bermuda is a small island (22 square miles) overseas territory of the United Kingdom home to a very high standard of living for its 65,300 citizens. Bermuda is well known as a world class international financial centre, one of the world’s best offshore tax and banking & trust havens. The insurance industry within Bermuda ranks as one of the world’s largest.
Economic Statistics
Total GDP as measured by purchasing power parity stands at $2.3 billion USD (2003) with corresponding GDP/Capita at $36,000 USD. Inflation for year 2003 at 3.3 percent. Major trading partners include the United States, United Kingdom, Netherlands, Brazil and Canada. No oil production, 80 percent of food requirements is imported. No corporate income taxes.
CURRENCY: ISO Symbol ‘BMD’, Bermudian dollar. At time of review on March 13, 2006, the Bermudian dollar had an exchange value of 1 BMD to the US-dollar (USD) at par and/or $545.40 BMD/USD to one ounce of gold ‘XAU’. The USD is accepted everywhere, it is an unofficial parallel currency to the Bermuda dollar. No exchange controls. The Bermuda Monetary Authority (BMA) handles the currency management for the Bermuda dollar.
CURRENCY HISTORY: the BMD has been in circulation since 1970, previously the British pound was the currency in use for Bermuda. Historical exchange quotes include November 1995 at par to the USD.
CURRENCY FORECAST: hurricane risk - weather. Tourism and financial services will remain an important component for national wealth. Bermuda’s insurance industry held $164 billion USD in assets (2003) and collected $48 billion USD equivalent in gross insurance incomes. Please read the write up on UNITED STATES in this BI.C currency index for further currency risk information as it relates to the USD. Current currency risk is attributed to the USD looking vulnerable with an increased probability of another leg down in currency valuation. If the USD does indeed decline another 25 to 30 percent to a trade weighted basket of currencies, the Bermuda Monetary Authority may at some point wish to switch from a hard USD peg to a currency basket peg. A currency basket for the BMD may include the British pound, US-dollar, Euroland euro and Canadian dollar - Bermuda’s main trading partners.
