Belize PM Insists Dollar Will Not Be Devalued
#213392
08/18/06 12:21 AM
08/18/06 12:21 AM
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Joined: Oct 1999
Posts: 83,509 oregon, spr
Marty
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Belize PM Insists Dollar Will Not Be Devalued
Hardbeatnews, NEW YORK, N.Y., Fri. Aug. 18, 2006: Belize Prime Minister, Said Musa, is insisting that country’s dollar will not be devalued in spite of nearly US$1 billion debt that’s owed to external creditors.
Musa, in an interview with Belize’s Love FM’s morning show, said a devaluation “does not make sense(and) it will not assist Belize in any way(but) it will put our debt burden in a an even worst position …” The PM, whose country is also part of the CARICOM grouping, added, “Devaluation will just increase the cost of living which will make the situation worst because we are spending more on what we import than what we export.”
“So how will it help the situation?” he questioned. Musa also insisted that the country will meet its debt obligations despite being practically bankrupt. “We have never defaulted and we will continue to pay our debt so long as the cash flow allows us to,” he told the radio hosts.
The PM, facing a general election in 2008, however, agreed that his administration has to work harder in order to restore credibility. But he insists that despite all the adversity, that the People’s United Party still offers the best hope for moving the country forward.
Musa’s comments come as the international credit bureau, S&P, cut the country’s credit rating to CC, or just above default status. And as the Belize dollar stood at about 50 US cents and 39 cents on the Euro.
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Re: Belize PM Insists Dollar Will Not Be Devalued
#213396
08/22/06 10:02 PM
08/22/06 10:02 PM
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Joined: Nov 2002
Posts: 2,533 Belize
Short
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The reason why prices will go up proportionally in case of devaluation is that most goods in Belize are imported, and paid for in foreign currency.
Also:
Belize debts are in US$. Taxes to pay back those debts are raised in BZ$. When you devaluate the BZ$, you will increase your debt in the short term, and make the situation worse.
Live and let live
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Re: Belize PM Insists Dollar Will Not Be Devalued
#213399
08/23/06 10:28 AM
08/23/06 10:28 AM
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Joined: Mar 2001
Posts: 2,730 Illinois, Arkansas,South Dakot...
bywarren
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The bright side of this is when the economic crisis happens, and it will happen, is the country will be forced to go to a currency that is accepted internationally. Yes, this will be a huge hardship on the people of Belize who have savings in Belize dollars. But, once the country has a currency that is actually worth something to people outside of Belize, it will stimulate foreign investment. Investment that will generate additional exports thru the products that Belize produces. Dollars brought in from tourism will have the incentive to remain in Belize as opposed to being used only to purchase items for import or be stashed in foreign banks The only thing that would prevent the collapse of the Belize economy would have been fiscal reforms that were needed long ago. Now the corrupt and inefficient government has drained the country of assets needed to accomplish this. Now they are attempting a last resort effort to gain additional revenues thru added taxes. That is only going to make matters worse and depress the incentive for investment, trade and increase the costs to vacation in Belize thus bringing in less money thru tourism. The bottom line is that the Belize people will have to suffer substantially before the needed reforms can become effective. If the needed fiscal policies were initiated that would have prevented a crisis, the Belize people would have had to suffer thru those. A “tightening of the belt” would have effected everyone. Unfortunately it is too late for that. A total collapse, or in other words, the country going bankrupt is inevitable. The real important question is, Will the people be able to find and elect competent people to run the country and lead it to prosperity after the collapse?
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Re: Belize PM Insists Dollar Will Not Be Devalued
#213401
08/23/06 01:44 PM
08/23/06 01:44 PM
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Joined: Mar 2004
Posts: 705 wisconsin
krehfish
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International monetary stuff is over my head. But,if the $1BZE is at .50USD, Why wouldn't I pay the bank charges to purchase BZE before I come down? Beats the hell out of using a cc, then paying a conversion surcharge. Yeah, I know I'm limited to what, $5000 in BZE on entry? But didn't I just save $2500 on my vacation?
Flyfishing my way through mid-life crisis.
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