20 Pence – Falkland Islands

The Falkland Islands’ currency situation in 2023 remains defined by its unique dual-currency system and a strong, stable economic position. The official currency is the Falkland Islands pound (FKP), which is pegged at par (1:1) with the British pound sterling (GBP). Both currencies circulate interchangeably on the islands, with Sterling widely accepted everywhere. This parity is maintained by the Falkland Islands Government (FIG) and is underpinned by the territory's substantial fiscal reserves, which are managed conservatively and provide a robust backing for the local currency.

Economically, the islands generate sufficient foreign exchange, primarily from the lucrative fishing licensing industry, which accounts for the majority of government revenue. This income, supplemented by tourism, agriculture, and emerging hydrocarbon exploration interests, ensures a consistent inflow of Sterling. Consequently, there is no need for exchange controls, and the FIG operates a Currency Board arrangement, issuing local notes and coins only when fully backed by Sterling assets held in London. This discipline has historically ensured monetary stability and high confidence in the FKP.

Looking forward, the currency's stability in 2023 is not under any immediate pressure. The FIG's prudent financial management, significant reserves, and stable revenue streams act as a buffer against external shocks. The primary considerations for the future are less about the peg's viability and more focused on sustaining the economic foundations that support it, particularly in light of global economic fluctuations and the long-term prospects of the fishing sector. The system's simplicity and reliability continue to serve the islands' small, export-oriented economy effectively.