Belize: Selected Issues
International Monetary Fund, Mar 6, 2008 - Business & Economics - 21 pages
Belize should reduce debt ratios to comfortable levels for smooth market access, and reduce liquidity risks by stabilizing debt service. Streamlined management of the oil fund should be considered. Fiscal measures should compensate for the loss of oil revenues in the budget and avoid new borrowing. This note explores alternative measures of reserves adequacy and concludes that a reserves target of three months of imports is a reasonable benchmark. Reforms enabling more effective liquidity management involve removing the ceilings and moving to market-based interest rates.
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II MANAGEMENT OF OIL REVENUES IN BELIZE1
III ASSESSING RESERVES ADEQUACY IN BELIZE1
IV FISCAL COST OF LIQUIDITY MANAGEMENT1
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1/2 percent 40 percent accumulated savings amortizations on favorable analysis assets assumed Axel Palmason Bank of Belize Belize is expected billion U.S. dollars broad money budget Caribbean countries CARICOM Central Bank commercial banks debt exchange Debt Falling Due debt levels debt ratios decline debt service payments deviation shock domestic debt emerging market countries equivalent to three estimated exchanged debt exports shocks extemal external debt favorable terms finance ﬁscal fund’s govemment government’s gradually increase Gross fiscal cost Hurricane Dean imports and exports income statement International Monetary Fund international reserves liquidity management market access market-based interest rates medium-term projections million months of imports negligible in 2008 oil fund oil revenues one-standard deviation overdraft percent of GDP primary surplus principal author proﬁts projection period Reduce liquidity risks reﬂects reserves accumulation reserves adequacy benchmark savings would reach sector short-term debt Short-Terrn Debt Falling solvency T-bills three months transferred U-shaped trajectory