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PM Discusses US Currency Fight With Ashcroft Alliance
posted (July 29, 2016)
Today's press conference by the Prime Minister was dominated by talk of William Danny Mason and John Saldivar, but the press also got to ask about the situation with BTL. Government and the Ashcroft Alliance are back in court arguing over what portion of the judgment should be paid in US dollars and what portion in Belize dollars. The Prime Minister says it is clear enough to government:..

Rt. Hon. Dean Barrow, Prime Minister
"The Central Bank is saying to government you cannot be giving 70 million dollars more in foreign currency to pay Ashcroft. The Central Bank knows why it is saying that. In any event government does not want 70 million dollars more in US currency to pay Ashcroft, because government is absolutely convinced that Ashcroft does not deserve 70 million dollars more in US currency. I need to be careful because the application is before the Caribbean Court of Justice with respect to the settlement agreement, but Ashcroft knows as I know and as God above knows that our agreement was for that award to be split, that is what we asked the tribunal, so that it would be clear how much of it was for the shares and how much of it was for the accomodation agreement and that the entirety of the accomodation agreement minus of course claims for expenses. The entirety of the accomodation agreement was to be spent on the people of Belize. That is the only way I would have agreed to any settlement. For him to come now with an interpretation that would see him not only get this additional amount in US currency, but in consequence short change the 60% of the award that is for the accomodation agreement and so shaft the people of people of this country is absolutely intolerable."

And while Government says it is righteously refusing to pay the Alliance in the US dollars that are being remanded - it is also a practical necessity because to do so would wipe out the US dollar reserves at the cEntral Bank. That;s what hold the currency peg in place and as you saw in the letter form the governor of the Central Bank, it is very tight right now:

Rt. Hon. Dean Barrow, Prime Minister
"Please do not misunderstand what I apprehend the governor to be saying. He must carefully managed the reserves. He must carefully balance the competing claims for him to sell foreign exchange to various entities. He must do all this in such a way as to ensure that we dont run into trouble, that we dont hit a wall in 2020 when the payments for the super bond will reach that astronomical sixty-five million U.S. dollars. It is not that there is currently a foreign exchange problem or let me again be completely candid straightforward with you; to the extent that there is a bit of tightness in the system. That has to do more with the loss of correspondent banking relations. That has caused some sort of tightening, has caused a little bit of a queue. But that a part, there is no immediate problem. The gorvernor is pointing out that unless we do certain things and this is not news, we can get it from the IMF report. In 2020 with the advent of the full force of the super bond, we can hit a wall. Well I am here to assure that we will do whatever is neccessary to ensure that that doesnt happen."

The Prime Minister later suggested that if paying the bond would crash the economy, government would consider its options.

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