P.M. Briceño Justifies Lump Sum Payment to B.I.S.L.

Prime Minister John Briceño

According to Prime Minister Briceño, the Government of Belize will make a lump-sum payment to cover the B.I.S.L. settlement. He explained that eleven million dollars will be paid in Belize currency, while the rest of the payment will come from the Central Bank Reserve.

Prime Minister John Briceño

“Of course we are different. We are nothing like those on the other side. That is for sure. So, apart from settling this liability at a deep discount, government plans to draw down on its domestic financing account to pay the settlement. The cost of domestic financing in an emergency such as this would be almost six, would be almost half of the statutory post judgment rate of six percent. Just let me explain. Government borrows three point five percent, but the court orders you to pay at six percent. It is a no brainer. It is better we borrow from ourselves and pay three and a half percent and not have the court tell us we have to pay six percent. So, had we continued fighting and the government opt for the term with B.I.S.L., and then six percent would have been applicable? So, if we set up with B.I.S.L. and said ok we are going to pay you with terms, the interest rate would have been six percent, not three and a half percent. That is why we decided it is best we pay you off and we save on the interest than what government pays itself or pays the central Bank. In other words, the reason we are paying this in a single payment is because the interest rate that B.I.S.L. would demand and expect, and what the court would award, which is the six percent, compared to the government current domestic borrowing is almost half of what the court would have had us pay. Fortunately, the Central Bank’s reserves, thanks to the country’s stellar macro economic performance are more than sufficient for government to source the foreign exchange necessary for government to source the foreign exchange component of this settlement.”