1 Pound – Jersey

In 1991, the currency situation in Jersey was one of formal stability underpinned by a close and dependent relationship with the United Kingdom. The island's official currency was, and remains, the Jersey pound, which was issued by the States of Jersey. Crucially, this local currency was not independent but was pegged at par with the British pound sterling (GBP). This meant one Jersey pound always equalled one pound sterling, ensuring seamless economic integration with its largest trading partner.

This peg was maintained through a currency board-style arrangement, where the issue of Jersey pound notes and coins was fully backed by sterling reserves held by the States of Jersey. The UK currency also circulated freely on the island and was universally accepted. This system provided Jersey with monetary stability and low transaction costs for trade and finance, which was vital for its economy, particularly its growing financial services sector. There was no active monetary policy; interest rates and broader monetary conditions were effectively set by the Bank of England.

The context of 1991, however, saw this stable system operating against the backdrop of UK membership in the European Exchange Rate Mechanism (ERM). While Jersey was not itself a member, the value of its currency was indirectly affected as sterling's value was managed within the ERM's bands. This period of tension for sterling would culminate in the UK's forced exit from the ERM on Black Wednesday in September 1992. For Jersey in 1991, the primary concern was the potential turbulence this could cause for its anchor currency, though the immediate situation on the island remained one of routine stability under the long-standing sterling peg.