Belize

Belize (self-governing from 1964 and independent from 1981) was initially pegged to sterling but switched its peg to the USD in 1976, moving also from a currency board arrangement to an exchange rate fix with limited monetary policy. Over the years that followed financial development was limited, while central bank financing of fiscal deficits was a continuing issue and threatened the peg at some points, but the fix remained.

Years	Targets and attainment	Classification
1974-76	standard currency board against GBP (with occasional adjustments in earlier years when pound moved sharply against dollar); mid-1976 peg switched to USD	pure currency board PCB
1977-2017	peg to USD with narrow spreads set by new Monetary Authority established late 1976; Authority’s reserve coverage requirement unclear, operates some monetary policy in form of interest rate setting, occasional credit controls, reserve and liquid asset ratios; parallel foreign exchange market with varying spread; Authority replaced in late 1982 by Central Bank of Belize, which maintains peg with same narrow spreads; monetary policy operations limited but central bank lends varying amounts, in advances and Treasury bills purchases, to cover government deficits; transfers of public sector deposits from central bank to commercial banks, for monetary policy purposes, in late 1980s, reversed early 1990s; 1994-5 interest rates liberalised (with exception of those on Treasury bills); monetary growth continues to be strongly related to fiscal deficits, with balance of payments and reserves consequences; from mid-1990s tighter exchange controls and some forex rationing, rise of parallel forex market with widening spread, increased external borrowing  by government and (with government guarantees) Development Finance Corporation (DFC); 2001 parallel market semi-legalised; from 2005 in response to severe fiscal and external imbalances some fiscal-monetary tightening; insolvent DFC wound down 2006; external debt restructured 2007; small-scale and time-limited oil production from 2006, but major floods 2008; parallel market premium disappears late 2000s; 2010 plans to develop government securities market and indirect monetary instruments but little action; further debt restructuring 2013, and again in 2017; monetary growth remains dominated by fiscal deficits which are more or less controlled	augmented exchange rate fix AERF

Selected IMF references: RED 1983 pp23-8, 29; RED 1984 pp42-4; SR 1985 p13; RED 1985 pp25-6; RED 1989 pp26-7, 44-5; RED 1993 pp15-16; RED 1996 pp18-19, 46-8; RED 1998 pp21-2; SR 2000 pp11-12; SR 2001 pp13-14; SR 2002 pp5-6, 13-15; SISA 2004 pp5-10, 21-17; SR 2004 p17; SR 2006 pp7; SR 2010 pp4, 10, 14; SR 2011 p11; SI 2014 pp14-16, 26-9; SI 2015 p13.

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