Melekeok is a city in the island country of Palau. It has served as Palau's capital city since 2006, despite its small population of about 250 people. It is the smallest national capital in the world by population.
Palau, officially the Republic of Palau, is an island nation in the Pacific Ocean, some 500 miles (800 km) east of the Philippines and 2,000 miles (3,200 km) south of Tokyo. Having emerged from United Nations trusteeship in 1994, it is one of the world's youngest and smallest sovereign states. In English, the name is sometimes spelled Belau in accordance with the native pronunciation. It was formerly also spelled Pelew.
Palau uses the U.S. dollar as its currency. This has the advantage of bypassing the expense of running a central bank. Also, the currency is completely convertible, and price stability is reasonably well ensured, as Palau does not have the ability to print currency. The rate of inflation was less than 3 percent a year from 1996-98.