Belize's Monetary Policy: Understanding The Fixed Exchange Rate System

Belize has a fixed exchange rate with the US dollar, with two Belizean dollars always equalling one American dollar. This is known as a hard peg, and it means that travellers to Belize do not need to worry about calculating exchange rates. The Belizean dollar is abbreviated as BZD or BZ$ and is divided into 100 cents, in the same way as the US dollar. The currency was first issued in 1974, and its peg to the US dollar has been in place since 1978.

The Belize Dollar is abbreviated as BZD or BZ$

The BZD is used in the foreign exchange market, where currencies from different countries are bought, sold and exchanged. The foreign exchange rate for the Belize Dollar was last updated on 5 June 2023. The Central Bank of Belize, established in 1982, manages the nation's foreign reserves and issues its currency.

The BZD is divided into 100 cents and includes banknotes and coins. BZD banknotes come in denominations of $2, $5, $10, $20, $50 and $100. Coins include 1, 5, 10, 25 and 50 cents, as well as BZ$ 1 coins.

Belize, a former British colony, gained independence in 1981. Prior to its independence, Belize used the British Honduras dollar, British pounds, and Spanish dollars at various points in its history. The Spanish dollar was the currency in circulation in Belize between 1765 and 1825. After this, the British sterling monetary system was used, as was the case in some other countries in the region including Jamaica and Bermuda.

The Belize Dollar is pegged to the US Dollar at a rate of 2:1

The Belize Dollar (BZD) is the official currency of Belize, with the currency code BZD and the symbol BZ$. It is divided into 100 cents. The Belize Dollar is pegged to the US Dollar at a rate of BZ$2 to US$1. This means that one US Dollar is equivalent to two Belize Dollars.

The Belize Dollar was first issued in 1974, replacing the British Honduras dollar. Prior to its independence in 1981, Belize used various currencies, including the British Honduras dollar, British pounds, and Spanish dollars. Belize's currency was initially pegged to the British pound, but when the UK abandoned the gold standard in 1931, the Belizean currency became pegged to the US Dollar. Since 1978, the Belize Dollar has been pegged to the US Dollar at the current rate of 2:1.

The Central Bank of Belize, established in 1982, manages the country's foreign reserves and issues its currency. Belize's inflation rate was estimated at 0.6% in 2019, and its GDP growth rate was 2.5%. The economy of Belize is highly dependent on tourism and agriculture, with exports including sugar, bananas, citrus fruits, and crude oil.

The fixed exchange rate between the Belize Dollar and the US Dollar simplifies transactions for both locals and visitors. Many businesses in Belize accept US Dollars, and ATMs typically accept foreign cards. However, it is important to note that the Belize Dollar is generally worthless outside of the country, and exchanging it abroad may result in unfavourable rates.

The Belize Dollar is the official currency of Belize

The Belize Dollar is divided into 100 cents, and the official value is pegged at BZ$2 = US$1. This fixed exchange rate has been in place for over 25 years and has remained unchanged since 1978. The Belize Dollar is hard-pegged to the US Dollar, meaning that the exchange rate is fixed, and the Belizean currency is backed by US currency reserves. This is intended to stabilise the value of the Belize Dollar and prevent inflation.

The Central Bank of Belize, established in 1982, manages the nation's foreign reserves and issues its currency. The bank also sets the exchange rate for other currencies. As of August 2020, 1 BZD was equal to US $0.50. The Central Bank of Belize also issues currency notes, with denominations of $2, $5, $10, $20, $50 and $100. The late Queen Elizabeth II appears on all banknotes issued by the Central Bank of Belize.

The Belizean economy is highly reliant on tourism and agriculture, with exports including sugar, bananas, citrus fruits, and crude oil. The service sector also contributes significantly to the country's GDP, although Belize remains primarily a cash-based society.

The Belize Dollar is divided into 100 cents, like the US Dollar

The Belize Dollar is the official currency in Belize, with the currency code BZD. It is often abbreviated with the dollar sign $, or BZ$ to distinguish it from other dollar-denominated currencies. The Belize Dollar is divided into 100 cents, like the US Dollar.

The Belizean coins are one cent, five cents, ten cents, twenty-five cents, fifty cents, and a one-dollar coin. The BZD banknotes come in denominations of $2, $5, $10, $20, $50, and $100. The reverse of every banknote features a portrait of Queen Elizabeth II of Britain, as Belize is a member of the Commonwealth. The front of the notes features local wildlife or prominent buildings in the country.

The Belize Dollar is pegged to the US Dollar at a rate of 2:1, so two Belizean dollars will always equal one American dollar. This fixed exchange rate means that visitors to Belize do not need to worry about calculating exchange rates.

Belize's currency was initially pegged to the British pound, but when the UK abandoned the gold standard in 1931, the Belizean currency became pegged to the US Dollar. Since 1978, the Belize Dollar has been pegged to the US Dollar at a rate of BZ$2 to $1 USD.

The Belize Dollar has distinctive security features, making it difficult to counterfeit

The Belize Dollar has distinctive security features that make it difficult to counterfeit. The Central Bank of Belize has incorporated these features to protect Belizeans against counterfeits. The Belize dollar bills have a watermark in the paper, which is embedded during paper production. The watermark is a jaguar for the $100 and $50 bills, and the image of the "Sleeping Giant" sculpture by George Gabb on the $20, $10, $5, and $2 bills. The watermark also includes the value of the bill, spelled out in capital letters.

The paper used for the Belizean dollar is also challenging to replicate, and it contains a thin metal security thread with the word "Belize" printed on it. This thread alternates between the word "Belize" and its mirror image, and it has been made slightly wider for better visibility. Additionally, the bills have a see-through window with a different image for each denomination, such as the head of a tapir on the $20 bill and a Maya stella on the $2 bill. The real currency is made from cotton fibres, which do not reflect UV light, except for certain treated areas that fluoresce with the dollar denomination.

The currency also has security features that are more easily identifiable by sight or touch. The front of the notes features local wildlife or prominent buildings in the country, while the reverse features a portrait of Queen Elizabeth II of Britain, as Belize is a member of the Commonwealth. The bills' serial numbers, printed in the top right corner, have digits that gradually increase in size, and the same number is printed vertically on the left side. The intaglio printing technique gives the bills a raised, embossed feel, which is challenging to replicate.

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