GGP - Guernsey Pound

Overview of the Guernsey Pound (GGP)

The history of the formation and development of the Guernsey Pound (GGP)

Before the 19th century, Guernsey mainly used French currency. French livre coins were accepted until 1834, and the French franc was used until 1921.

In 1830, Guernsey issued coins valued at 1/80 of a French franc. The denominations included 1, 2, 4, and 8 cents. 

In 1848, a decree established the pound sterling as legal tender but was abolished after 2 years. Therefore, French currency and local currency continued to circulate.

In 1870, British coins and banknotes were officially recognized. In 1921, Guernsey officially adopted the pound sterling and maintained the Guernsey pound with an exchange rate to the British pound. 

The Guernsey pound is not a separate currency but rather paper and coinage issued locally. Similar to Scotland, England, and Northern Ireland. 

Therefore, the ISO 4217 currency code does not include a separate currency code for the Guernsey pound. Therefore, when wanting to distinguish it from the British pound, the abbreviation GGP is used.

In 1971, Guernsey implemented a decimal system and began issuing full denominations.

The Guernsey Pound (GGP) Denominations

The denominations of the Guernsey pound include both coins and banknotes. Issued with denominations similar to the British pound in the United Kingdom:

• Coins: 1p, 2p, 5p, 10p, 20p, 50p, £1, £2

• Banknotes: £1, £5, £10, £20, £50

All these denominations can be used in parallel and exchanged at par with other British pound currencies.

Guernsey banknotes and coins are designed with cultural heritage symbols such as images of history and landscapes of Guernsey.

Although it has the same value as the British Pound, the Guernsey Pound is not widely accepted outside of Guernsey and is not commonly accepted in the United Kingdom and other countries in the region.

The current exchange rate of the Guernsey Pound (GGP)

The exchange rate of the Guernsey Pound against the USD is: 1 GGP = 1.328 USD. That is, 1 USD = 0.752 GGP.

Compared to the British Pound, the exchange rate equivalent to 1 GGP = 1 GBP always maintains a stable level that can be substituted in some transactions. The reason is that the GGP is not as popular and widely used as the GBP.

The exchange rate of the Guernsey pound fluctuates due to various factors such as the global economic situation, interest rates, and government financial policies.

Factors affecting the value of the Guernsey Pound (GGP)

The value of the Guernsey pound is affected by various factors. Here are some of the main factors: 

Monetary policy

• Interest rates: The Central Bank's adjustment of interest rate policies and monetary measures will also affect the exchange rate of the Guernsey pound.

• Inflation control: High inflation levels lead to a decrease in the purchasing power of the GGP, causing the value of the GGP to drop.

The economic situation of Guernsey

GDP Growth: Guernsey has an economy that relies on the tourism, manufacturing, and financial services sectors. Therefore, the growth of these sectors will increase output and income, enhancing the value of the GGP currency and vice versa.

Guernsey's trade partners

Guernsey mainly trades with countries such as the United Kingdom and European countries. Therefore, if one of the trade partners encounters difficulties, it will reduce exports from Guernsey and decrease the value of the GGP.

The political factors of the nation of Guernsey

Guernsey is a nation with territory dependent on the UK, so any signs such as political conflicts or policy changes will reduce the value of the GGP. Therefore, stability in foreign and domestic policies will strengthen investor confidence. This will increase the value of the Guernsey pound.

The GGP has often been viewed as a safe-haven currency, akin to other regional currencies that exhibit resilience during economic uncertainty. However, empirical studies indicate that the GGP, like many local currencies, can be perceived as risky, particularly in volatile economic climates. This risk is compounded by the influence of external factors, such as the economic policies of the UK and global market conditions, which can affect the GGP's value and stability.

Moreover, the implications of Brexit have introduced additional complexities to the future of the GGP. The potential for increased protectionist policies and shifts in trade dynamics could lead to fluctuations in the GGP's value against the GBP and other major currencies. Studies have shown that the British Pound has already experienced significant volatility following Brexit announcements, which could similarly impact the GGP if it remains closely tied to the GBP. The interconnectedness of local currencies with broader economic trends underscores the importance of monitoring external economic indicators and their potential effects on the GGP.

The value of the Guernsey Pound (GGP) is influenced by many factors including monetary policy, economic conditions, international trade, foreign investment, and political risk. To predict the future value of the Guernsey Pound (GGP), investors and analysts need to closely monitor these factors and their impact on the Guernsey economy.