Honduras works on Currency Stabilization
The Government of Honduras is adopting various measures to address challenges related to the availability of dollars, aiming to stabilize the economy and ensure a proper flow of foreign currency within the country. This situation has raised concerns among importers and citizens, impacting the purchasing power for imported goods and the stability of prices in the domestic market.
The availability of dollars has decreased due to several factors, including a reduction in family remittances, which are a significant source of foreign currency for the Honduran economy. Additionally, a decline in exports and a high dependence on imports have contributed to this situation.
To tackle these challenges, the Central Bank of Honduras (BCH), in conjunction with the Ministry of Finance and the Attorney General’s Office, has implemented several measures:
- Reactivation of the Currency Auction: The BCH has decided to reactivate the public auction mechanism for foreign currency to control the exchange rate and reduce speculative pressures. This system allows for the equitable allocation of currency among different economic actors, preventing uncontrolled devaluation of the lempira.
- Injection of Currency into the Foreign Exchange Market: During 2023, the BCH has injected USD 319.7 million into the market, in addition to the USD 13,218.8 million generated from exports, remittances, and other income, ensuring that economic agents have access to more than 100% of the foreign currency generated.
- Agreement with the Private Sector: The government and private entrepreneurs have signed an agreement that includes ten key measures, such as the liberalization of exports with expedited procedures, immediate refund of tax refund certificates (CDIMs), and the issuance of Central Bank bonds in dollars.
- Control and Regulation of Foreign Exchange Agents: According to a statement from the BCH, only authorized institutions are allowed to trade currency within the national territory, with penalties for those who violate this regulation.
The Honduran population is closely monitoring the evolution of this issue, recognizing that resolving it will require both internal measures and external support to restore confidence in the financial market and promote more stable economic conditions in the future.
Gabriela Aguirre
gabriela.arias@garciabodan.com
Senior Associate
García & Bodán
Honduras