BELIZE-Central bank defends new exchange rate for local currency against US dollar

0
475

BELMOPAN, Belize, CMC – The Central Bank of Belize (CBB) has defended its decision to fix the exchange of the local currency at two to one US dollars even as it acknowledged that there had been some “pushback” from commercial banks.

“Certainly, the commercial banks as authorized dealers voice concerns…that they would be losing or incurring no more expenses for the administration of certain services and lines of products,” said CBB Governor Kareem Michael.

“That’s well within their right to express. They’re a private institution motivated by profit and to return income or dividends to its shareholders. So that’s understandable.

“What we do hope is that the financial or business model employed by commercial banks would account already for some of these services, and then you’re pricing various products to compensate for what may have been lost through this harmonization,” Michael added.

The Central Bank said that the official fixed buying rate of the US dollar at two Belize dollars is effective May second, with Michael saying that the focus has primarily been on cash instruments, specifically currency notes, which were subject to complaints and concerns from the public.

He said that by resetting the buying rate at two to one for authorized dealers, issues faced by individuals in their everyday transactions would be addressed.

“The decision that was recently made was on the cash portion of the cash instruments, the currency notes. So the US dollar that, let’s say, John Doe goes to the commercial bank and gives to the commercial bank to place into his account. That has gone from that margin of 1.982 to strictly two back to the exchange rate.

“We, the Central Bank, for several years, have received a lot of concern and complaints from the public regarding this issue. The example I like to use is the taxi or tour operator who may have received a tip for 20 US dollars and then attempted to go to the gas station to put in the equivalent of $40 gas.

“He probably would’ve been in several instances, uh, been refused by that gas station of a, of taking the US$20 because when that owner of that gas station goes to the commercial bank deposit, he gets, that owner of the gas station gets roughly $38 and 60 cents after having given out the equivalent of 40 billion dollars in gas.

“ So you can see how that’s an issue for the everyday person. So what we did in early May was to focus first primarily on the cash. That ends up in our economy. It’s part of circulation that we’re saying, listen, um, that rate at which the commercial banks as authorized dealers can buy that cash is back to two to one,” Michael added.

LEAVE A REPLY

Please enter your comment!
Please enter your name here