GIP - Gibraltar Pound

Overview of the Gibraltar Pound (GIP)

The history of the formation and development of the Gibraltar Pound (GIP)

Before the Gibraltar pound was introduced, Gibraltar used various currencies due to being occupied by different empires. Among them were the Spanish currency and the British pound used in Gibraltar. 

In 1927, the Government of Gibraltar began introducing its own Pound currency to replace the previous currencies. Gibraltar first issued banknotes and in 1988 released coins, completing Gibraltar's currency system.

Currently, both the British Pound (GBP) and the Gibraltar Pound (GIP) are widely used in Gibraltar. However, the GIP is not recognized as an official currency in other countries and is only accepted in certain areas within the United Kingdom due to its 1:1 exchange rate with the British Pound.

The emergence and development of the GIP currency affirm its independence and significance in the strategic crossroads of Europe and Africa.

The Gibraltar Pound (GIP) Denominations

The current issue of the Gibraltar pound includes both coins and banknotes with the following denominations: 

Gibraltar Pound Coins

• 1 penny

• 2 pence

• 5 pence

• 10 pence

• 20 pence

• 50 pence

• 1 Pound (£1)

• 2 Pounds (£2)

• 5 Pound (£5)

The coins of Gibraltar have distinctive designs featuring images related to Gibraltar. One can mention the symbol of the Rock of Gibraltar or images of the wildlife and history of this land.

Gibraltar Pound Banknotes

• £5

• £10

• £20

• £50

• £100 rarely used

Gibraltar banknotes are often designed with images of Queen Elizabeth II along with historical and cultural symbols of Gibraltar, including the Rock of Gibraltar, local architectural landmarks, and symbolic images of the United Kingdom.

The close relationship between the Gibraltar pound and the British pound

These two currencies are closely linked because Gibraltar is a British Overseas Territory.

The exchange rate of the Gibraltar pound

The exchange rate of the Gibraltar pound is pegged to the British pound at a 1:1 ratio, meaning 1 GIP = 1 GBP. The Gibraltar pound is equivalent to the British pound, so the exchange rate of the GIP against other currencies is similar to that of the GBP.

The current exchange rate of the Gibraltar pound against the US dollar and the Euro is:

• 1 GIP ≈ 1.31 USD

• 1 GIP ≈ 1.25 EUR

This exchange rate may change over time depending on fluctuations in the international financial market.

Used simultaneously in Gibraltar

In Gibraltar, both the Gibraltar pound and the British pound are accepted as means of payment. However, outside the territory of Gibraltar, the Gibraltar pound is not widely accepted. But the British pound is a widely accepted foreign currency globally, so it is used as a common means of payment.

Banking and monetary control system

The Central Bank of Gibraltar Government is responsible for issuing and managing the GIP. However, in financial terms, the GIP is heavily dependent on the banks and regulations of the United Kingdom, such as interest rates.

Relying on the policies of the United Kingdom also helps the Gibraltar pound to be stable and highly reliable for investors.

Economy and trade

Gibraltar is a small economy, and most business, trade, and financial activities are closely linked to the United Kingdom. The British pound is used for international trade transactions in Gibraltar, further strengthening the connection between the two currencies.

Thus, the relationship between the Gibraltar pound and the British pound is a strong link that helps stabilize the exchange rate and increase the value of the Gibraltar pound (GIP) in the international financial market.

Factors affecting the value of the Gibraltar Pound (GIP)

The value of the Gibraltar Pound (GIP) is influenced by several interrelated factors. The GIP is pegged to the British Pound Sterling (GBP) at par, which means its value is directly linked to fluctuations in the GBP. Consequently, any changes in the economic conditions of the UK, including inflation rates, interest rates, and overall economic growth, can significantly impact the GIP's value.

The economic stability of Gibraltar itself plays a crucial role. Factors such as tourism, financial services, and trade contribute to Gibraltar's GDP and, by extension, the strength of the GIP. Political stability, particularly in relation to Brexit and its implications for Gibraltar's economy, also affects investor confidence and currency valuation.

External factors, including global economic trends and geopolitical events, can influence the GIP's value. For instance, changes in the Eurozone economy or shifts in trade relations may indirectly affect Gibraltar's economic landscape and, consequently, the GIP.

The value of the Gibraltar Pound is influenced by a complex interplay of economic conditions, political stability, tourism, trade dynamics, and external factors. Understanding these influences is crucial for stakeholders in Gibraltar and beyond. As Gibraltar navigates its unique position in the global economy, particularly in the context of Brexit and its relationship with the UK and the EU, continuous monitoring of these factors will be essential for predicting future trends in the value of the GIP.