BCIE To Resume Loans To Honduras

The Central American Bank of Economic Integration (BCIE in Spanish) announced today that it was renewing operations in Honduras, suspended 7 months ago after the coup. Its Board of Directors adopted an accord aimed at normalizing its operations in Honduras. The BCIE will first restart credit and loans to the private sector, then later on, look at resuming credit and loans to the government of Honduras. The BCIE does not recognize the government of Roberto Micheletti Bain.

Honduras Suspends Payments To BCIE

Business News Americas reported this afternoon that it had confirmed that the de facto government has suspended payments on $405 million in debt with the Central American Bank of Economic Integration (BCIE in Spanish).

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Millennium Challenge Corp. Pushing to Restart Honduras Loans

The Millennium Challenge Corporation (MCC) office in Honduras established a drop dead date for the Central American Bank of Economic Integration (BCIE in Spanish) to restart loans to Honduras totalling $130 million.

"The resources of the BCIE are still suspended and we need a determination by February 2010 at the latest, or we'll have to phase out the program," said Martin Ochoa, director of the MCC office in Honduras.

The BCIE loan supports work on the "dry canal" project, specifically a stretch of road from Tegucigalpa to Rio del Hombre.

Insurrection In Investment/Pension Funds

The Banco Central of Honduras issued a new regulation governing banks, requiring them to withdraw all their funds from the Centralamerican Bank of Economic Intergration (BCIE in Spanish) by the end of September. According to their own report, Honduran banks withdrew all their funds, since they are governed by rules set by the BCH.

Pension and Investment funds are not regulated by the BCH, and there's every indication that they've decided not to comply with the rule according to El Heraldo. José Luis Moncada, president of the National Commission of Banks and Securities (CNBS) said "these institutions have the order, but the decision belongs to the directorate of each institution. Most have withdrawn nothing." "The CNBS does not have the legal power to sanction them."

Among the funds that have not withdrawn their money from the BCIE are INJUMPEMP (Instituto Nacional de Jubilaciones y Pensiones de los Empleados Públicos ), INPREMA (Instituto de Previsión del Magisterio) and IHSS (Instituto Hondureño de Seguridad Social). Combined, their deposits in the BCIE total some $57 million, out of $129 million that all of Honduras had deposited in the BCIE.

The de facto government's Secretary of Finance, Gabriela Nuñez, said this was supposed to send a message to the BCIE about their illegal political action. The BCIE has not recognized the de facto government and therefore suspended all open loans and refused to discuss new ones.

The BCIE turns its back

The Central American Bank of Economic Integration (BCIE in Spanish), has voted to suspend funding projects in Honduras, which irritates Honduran banker and coup funder Jorge Bueso. "They're violating their charter by not treating members as states rather than as simple governments", Bueso said to El Heraldo. The decisions of the bank should be based on technical and economic principals, consequently they should not consider any political criteria," Bueso added. Bueso owns the Banco de Occidente among other financial holdings.

The BCIE, meeting in Panama yesterday, voted to suspend supplying funds to Honduras. Nick Rischbieth, President of the BCIE, noted that the subject of Honduras was the only subject on their agenda. He predicted that this was a transitory problem, and with a new government, funds would start flowing in a regular fashion.

The Banco Central of Honduras had ordered (Resolution 377-8/2009, and 378-8/2009) all national banks in Honduras to withdraw their funds deposited with the BCIE, substituting the World Bank as an acceptable repository. The BCIE has not disbursed funds to Honduras since the coupon June 28.