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Dec 15, 2016

More Money in the Economy Not a Good Thing, Opposition Senator Claims

Eamon Courtenay

Among the bills considered by the Senate today is the Treasury Bill (Number Three) Amendment Bill, which juggles the limits that Government can raise on treasury bills and treasury notes. There is a net increase of a quarter billion dollars which should adequately cover the second B.T.L. Arbitration Award payment. But it brings its own pitfalls. Lead Senator for the P.U.P. Eamon Courtenay addressed both this and the limited news of the bondholders’ negotiations with Belize for Superbond three, which have not been going well.

 

Eamon Courtenay, P.U.P. Senator

“The problem with the Treasury Bill, is that it increases the ability of Government to borrow by a quarter billion dollars, and at this time it has a number of effects that are not good for the economy. The most important is that it will put more money into the economy; the Central Bank is in effect printing money. More money in the economy, more money in people’s pockets, more money in business pockets, means more demand for goods from outside, and therefore the need for more foreign exchange, which means the pressure on the foreign exchange rate peg is serious and that is heightened. Secondly, it seems to us that this increase in money supply is, again, for the Government of Belize. The Government of Belize’s fiscal position – by that I mean, its budgetary position, its own liabilities, its own accounts, are in the worst shape possible, and this is just going to add to it and make it more difficult. The little that we have heard is that the negotiations as expected, are not going well. And I understand there is a meeting before the end of the year and then another meeting very early in the New Year where the Government is hoping to tie up things. It seems to us that the bondholders are saying, very simply, we are not going to agree to a restructuring unless it is necessary. And it is necessary for the Government to satisfy the bondholders, by using the empirical, the real figures of the Government, to satisfy the bondholders that they can’t make their payments. If the bondholders believe that the Government of Belize is able make the payments – the two payments for next year – then why would they have to restructure? So it is a very delicate negotiating position that the Government is in.”

 

According to Courtenay, the P.U.P. has not been getting and is not expecting regular briefings on the Superbond negotiations due to Government’s fear of breach of confidentiality of the negotiations.

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