The Central Bank of Belize has a considerable history as the regulator of the country’s financial system. Established in 1982, and based today in an iconic building designed to resemble a Mayan temple on the waterfront of Belize City, the bank exists to regulate and develop the nation’s economy. The Bank states that it is committed to operate under the ethos of integrity, efficiency and transparency. The Central Bank of Belize Act (1982) stipulates the constitution and statutory responsibilities of the Board of Directors, the Governor and two Deputy Governors.
The Banks’s principal responsibilities are as follows:
Regulation – organisations overseen by the Central Bank include banks, credit unions, money transfer service providers and other financial institutions.
Monetary Policy – the Bank’s monetary policy objectives are controlled by law. They aim to foster monetary stability – especially exchange rate stability – and promote credit and exchange conditions, supporting the growth of the Belizean economy. The Bank can use direct and indirect policy tools to influence the supply and demand of money. Interestingly, Belize has maintained a fixed exchange rate of BZ$2.00 to US$1.00 for over 40 years. This is seen as a cornerstone of the country’s macroeconomic stability, designed to anchor inflation expectations and provide a stable environment for investment decisions.
Financial infrastructure – i.e., the legal and regulatory framework for financial sector operations. The Bank aims for the effective operation of financial intermediaries, to promote financial market growth and competition and produce more efficient allocation of funds – as well as more options for consumers.
A current focus is on developing Belize’s payment, securities settlement and remittance system. Non-cash payment instruments now used include cheques, debit cards, credit cards, and direct credits – with the cheque being the primary non-cash payment instrument. The Central Bank is actively working with the World Bank to develop an improved payments system.
Another framework priority for the Central Bank is the development of a Credit Bureau, to improve quantity and quality of credit information provided to local lenders. This would reduce credit risks and speed up the distribution of credit in the domestic system.
Public Advisories – the Central Bank of Belize issues advisories to inform the public of banks and financial institutions falsely claiming to be licensed in Belize. A notable part of this function is the issuing of Warning Circulars, including lists of banks and institutions not licensed to provide banking or financial business in Belize.
Abandoned Property – Unclaimed items held by financial institutions for over 10 years without apparent activity must be delivered to the Central Bank of Belize. Abandoned Property is published on a yearly basis and original owners and heirs can claim such abandoned property.
Securities – as the fiscal agent for the Government of Belize, the Central Bank facilitates the issue of Government securities in which the public may invest. These include Treasury bills, Treasury notes and Treasury bonds. Treasury bills are Government securities issued in multiples of $200 with a maturity period of not more than one year, while Treasury notes are issued in multiples of $1,000 with maturities ranging from one to 10 years. Government securities with a maturity of over 10 years are called Treasury bonds.
In addition to the above functions, the Central Bank also collects, compiles and publishes an array of economic, monetary and financial statistics on Belize. These include statistics and data on institutions, balance of payments, external trade, interest rates, public and private debt, economic indicators, updated either monthly or quarterly.
Last but not least, an important function of the Central Bank is research. The Bank regularly publishes economic and financial reports, including its own monthly financial position and balance sheets for domestic and international banks and credit unions. It also publishes its own research papers, and educational materials for the general public about Belize’s currency, economy and financial system.