Casas de cambio will open Monday
Aside from higher bus fares, Monday will also witness the opening of some new financial institutions in Belize. The first of the freshly licensed casas de cambio will begin buying and selling foreign exchange, primarily U.S. dollars, and no one is quite sure what to expect. Although the exchange rate will technically remain at two to one the casas will be allowed to charge a service fee, which, along with government taxes, will peg the selling rate of a greenback at a maximum of two fifteen Belize. James Janmohamed of San Pedro, is president of the newly formed Belize Association of Casa de Cambios. We asked him why the cambio system is better than the old fashioned illegal market.
James Janmohamed, President, Assoc. of Casas de Cambio
“The first reason is that when you formalise it, you stop anybody using it for ulterior motives such as money laundering and all of that. Because now everybody will be recorded, their names are recorded properly and handed back to Central Bank. Every month we will have a reporting procedure through the Central Bank, and everyday transactions are to be kept and can be scrutinised at any time. Firstly, that was the reason, secondly, the government will now get a revenue. There is a bunch of taxes to be paid, licence fees are quite high. There is also a stringent procedure, so government will make its revenue and be able to check what the casas de cambio personnel are doing.”
Stewart Krohn
“The simple creation of casas de cambio, does nothing to create more foreign exchange. So what is being done to address the situation where merchants or business people are the country cannot get the foreign exchange to pay for their imports? Is the introduction of casas de cambio going to help them?”
James Janmohamed
“The way it will help is it will curtail the use of foreign exchange in other illegal areas. You see, the people who can afford to pay you the most, are the people who can afford to pay that one, and a lot of them in the past have not been in legitimate businesses probably. So what will happen is first of all this will immediately bring down is that those people who will not be able to use the system, which was openly used in Belize for many years, let’s face it, without anybody being jailed or anything. So, anybody who was utilising it for their own personal illegal purposes will now be stemmed, they won’t be able to do it. So straight away, you won’t be able to sell U.S. dollars to those people. You will have to sell U.S. dollars to legitimate businesses. You will only be able to sell twenty-five hundred dollars. Anything above twenty-five hundred dollars will require a Central Bank permit.”
Janmohamed emphasised that the system will only work if the laws against illegal currency trading are rigidly enforced. Business people, particularly those in the tourism industry, should note that it is perfectly legal to accept U.S. dollars as payment for goods and services, but they are not allowed to simply exchange currency. The first list of licensed casas de cambio is expected to be published on Friday.
