Belize loses $3m on cross-currency swap with Citigroup
The government of Belize has revealed that a dollar/yen interest rate swap left it on the wrong side of changes in the strength US dollar - and more than $3 million out of pocket.
Although the advantage in interest rates gave the government a $2.3 million net gain, this was outweighed by the $5.6 million conversion loss, giving the government a total net loss of $3.2 million.
The Belize treasury and central bank said Citigroup had proposed the transaction, which marked the central bank's first foray into the derivatives market since a law change in the country in 2001 that enabled the body to engage in derivatives transactions.
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