Cambio owners meet to plan co-operation

Foreign exchange–or the lack of it–continues to plague both the private sector and by extension, the government that rations it. Today, in an effort to lay the groundwork for the new system of casas de cambio, ten license holders and four applicants met to form an association and elect officers. While members of that body this morning declined to speak to the media, a press release issued Monday by the government sheds some light on the situation, as well as raising a few questions. According to the release, cambio license holders will work together, much like a cartel, to set exchange rates, which are “reasonable and internationally accepted.” While the Belize dollar will remain technically pegged to the U.S. dollar at the traditional two to one ratio, the exchange houses will be able to charge a flexible “service fee”. This fee, which looks suspiciously like a floating exchange rate, would be set beneath a ceiling agreed to every two weeks after consultation with the Central Bank. It appears that dealers will be asked to exercise restraint in their mark-ups in exchange for Central Bank enforcement of their exclusive status as moneychangers. The association meets with Budget Minster Ralph Fonseca next Wednesday and at that time the public may learn more about the latest attempt to confound the basic laws of supply and demand.