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Will Paying Ashcroft Alliance Force A Crisis In Foreign Reserves?
Thu, September 29, 2016
So now, the Government has to find around 67 million US dollars to pay to the Alliance in a time when the country's foreign reserves are shrinking, and there are a number of financial pressures to contend with.

Two days ago, we told you how the IMF says that the economic outlook has worsened when compared to last year. The outgoing Central Bank Governor, Glenford Ysaguirre, wrote to the Financial Secretary saying that it would be destructive for the economy of Belize if the Central Bank were to even attempt to find 70 million US dollars more to meet this demand.

That was two months ago, and so, when the Financial Secretary exited from today's hearing, we asked if the country's reserves can realistically withstand the strain. He told us that it will have to:

Daniel Ortiz, 7News
"Will the Government's coffers be able to withstand? It appears as though it is at a dangerous level at this time."

Joseph Waight - Financial Secretary
"Well, indeed the court has ordered the payment of 66 million US dollars forthwith, as you heard. It will take a huge dent in our reserve. We do have reserves to cover the payment, but then, what is left, it will be difficult. It will be difficult."

Confirming that position, the Government sent out a release this afternoon, which says, quote, "(GOB) expresses its disappointment at the decision of the Caribbean Court of Justice... GOB does not agree with the ruling of the Court, but must accept it. GOB now has to pay 10% more of that award in US currency - that is 50% rather than 40% of the total award." End Quote.

The Government says that it is working out a strategy with the Central bank to avoid too large a drawdown on the foreign reserves. The release ends, quote, "GOB is comfortable that the ruling will cause no shock to Belize's foreign exchange position." We note that the ruling comes the day before Governor Glen Ysaguirre leaves his post.

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