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.
The population of Palau is approximately 21,000, of whom 70% are native Palauans of mixed Melanesian, Micronesian, and Austronesian descent. Many Palauans also have some Asian ancestry, from intermarriage between settlers and Palauans beginning in the 19th and 20th centuries.
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.