The article examines exchange rate competitiveness in the Eastern Caribbean Currency Union using three methods. First, it tests the purchasing power parity hypothesis to determine equilibrium real exchange rates. Second, it analyzes the sources of real exchange rate fluctuations in ECCU countries. Third, it estimates equilibrium current account norms. The main finding is that there is little evidence of overvaluation of the EC dollar. Additionally, the study shows that tourism has a significant impact on real exchange rates through increases in terms of trade and productivity.