The Central Bank of Belize regulates the primary financial mechanisms of the country, setting liquidity and cash reserve requirements and determining the interest rate structure. The Central Bank also regulates most forms of foreign exchange in the country. At the end of September 1996, after receiving a US$20 million loan from Taiwan and issuing a US$10 million regional bond, international reserves in Belize reached an all-time high of US$79 million. Budget controls and high reserves in the early 1990s gave way to increased spending and
|Exchange rates: Belize|
|Belizean dollars (Bz$) per US$1|
|Note: Fixed rate pegged to the US dollar.|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
widening government deficits in 1997-98, putting pressure on Belize's fixed exchange rate with the United States. Reserves fell sharply, dwindling to US$43 million by 1998. The declines were reversed in 1999 due to increased borrowing and larger inflows of foreign exchange stemming mainly from the sale of home mortgages to the Royal Merchant Bank of Trinidad. By the end of 1999 monetary reserves had rebounded to US$70.2 million.