The Cayman Islands is a British Overseas Territory located to east of Mexico and south of Cuba. It is a major offshore financial centre and is popular with some hedge funds, banks and other corporate entities due to its taxation laws. Its inflation ad indicated by cia.gov is 3.4% in 2011 and 0.3% in 2010. Its currency is the Cayman Islands dollar (KYD) and is pegged to the US dollar.