BELIZE CITY, Wed. Nov. 27, 2024
At its press conference on Wednesday, the Central Bank of Belize (CBB) reported on four of over 50 special projects it says it is currently spearheading. Among them is exchange control modernization, and in particular, revising the limits for foreign currency travel facilities to ease travel. Governor Kareem Michael shared that currently, authorized dealers of foreign currency (domestic banks) can issue US $250 per day for business travel, whereas those travelling for medical and vacation purposes can get US $3,000 each. Deeming the limits to be outdated, the Central Bank intends to introduce an increase across the board to US $10,000. This will take effect in January 2025. As expected, supporting documentation must be provided to bank tellers.
The Central Bank is also embarking on an update of the exchange control regulatory framework with the assistance of an IMF technical assistance mission. The work will also feature strengthening the exchange control administrative processes, and digitizing the data recording and monitoring system. An effect of this will be increased efficiency, as an applicant for a foreign currency permit will soon be able to use an online portal rather than filling out a form, and emailing it to the Bank or printing it to take to an authorized dealer. They will then be directed to the dealer of their choice to pick up the foreign currency.
Changes coming in credit union sector
The Central Bank of Belize has had the mandate to oversee the credit union sector since 2005. Today, Governor Kareem Michael informed the public that they have been working to increase the sector’s resilience and competitiveness. The assets held by credit unions in Belize have expanded to over 1 billion dollars since 2006, and they have also increased their range of products and services. The CBB is working on new credit union legislation to replace the original act that was enacted in 1944 and revised partially in 2022. Additionally, the bank intends to liquidate 19 inactive and defunct credit unions to eliminate “potential financial liabilities and risks to the overall financial stability …”
Implementation of credit reporting system planned for 2026
The Central Bank has been working for some time on implementing a Credit Reporting System (CRS). Governor Michael has pointed to the lack of such a data-driven system as one factor contributing to stubbornly high interest rates because the banks and financial institutions lack information on a customer’s creditworthiness to properly assess risk. At today’s conference, it was announced that the CRS should finally be operational in 2026 after the establishment of a Credit Bureau. Once the CRS comes on stream, customers will have a credit score based on their reputational collateral through their credit history. This will prove their capacity to repay their debt. The credit history will come from standardized non-traditional data like utility companies showing how customers have been repaying their bills. Other institutions to be included in the credit reporting system as data providers will be banks, credit unions, money lenders, insurance companies, the Development Finance Corporation (DFC), public registry and a Central Bank- designated person. Importantly, as part of data protection, the customer will have to consent to their data being released, and will have a right to know what has been shared. Additionally, they must be given access once every year to a free copy of their credit report. The data will be managed and stored by the Credit Bureau. Selected as the Credit Bureau operator is the international Credit Bureau Reporting and Business Information (CRIF).
Among the expected effects of the CRS are increased access to financing (loans, mortgages and other financial services) and financial inclusion for the unbanked, which currently stands at 30%. It is also expected to prevent over-indebtedness, given that lenders will be able to better assess credit profiles. As well, it is expected to contribute to lower credit costs for healthy borrowers.
New currency to be unveiled in January 2025
The promised new currency with the images of our two national heroes, George Price and Philip Goldson, is coming soon. Central Bank Governor Kareem Michael announced today that the unveiling of the new bank notes will take place in January 2025. “While the new bank notes will look different, the value remains the same,” emphasized Michael. He added, “Design does not equal value. A dollar is still a dollar. Our rate of exchange remains the same, which is two Belize dollars to one US dollar.”
The new bank notes will enter into circulation sometime in the third quarter of 2025, and are expected to have enhanced security features. Michael also noted that existing bank notes will remain in circulation until the Central Bank has retrieved a large share of what is in circulation – and that may take years.