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Shortage of Local and Foreign Currencies in Haiti
Did you ever go to your local bank in order to withdraw some of your money but your teller tells you that the bank is unable to meet your demands because they flat out do not have the money to give you?
It is not a scam; it is so true and in fact, such a situation is making national headlines as you are reading this post.
For what it is worth, your bank is not mismanaging your money or some employees did not steal so much that banks are having difficulties giving us some or all of our money upon requests.
This is what happens. Due to my lack of knowledge in Economic Sciences, I will have hard times making you fully understand the reasons behind Haitian banks not holding to their part of the bargain. I will not be using any technical terms to prove my point; I will use simple words; hopefully, you will grasp the main idea.
Okay, for people like us, money is this paper thing we carry in our pocket and ready to be cashed as fast as we crave for something but for big companies, money is a promissory note between a certain organization and its bank. It is a [negotiable bond] that states how much money an organization has and can spend whether in its home country or overseas.
Confusing; is not it? This is what I was trying to say. When an NGO says it has $1M to spend toward Haiti Earthquake Recovery; this organization is not really taking $1M to Haiti. In fact, it goes to Haiti with a piece of paper backed by the full faith and credit of its government treasury.
When it arrives in Haiti, it presents its piece of paper to any bank in Haiti, which will be more than willing to advance as much as Cash it needs to continue with its humanitarian efforts.
As such, NGOs are taking so much money against their bonds that Haitian bank reserves get depleted quickly and in a hurry, resulting in Haitians being turned down for money until their respective bank cashes NGOs’ savings bonds.
Since bonds, although worldly negotiable, must be exchanged by the issuing country, Haitians banks are then summoned to send these bonds to the issuing country in order to be converted into money as people like us know it. You see how long it can be before the actual money makes it to Haiti so it can be placed back into circulation?
Additionally, don’t assume money transfers you make to your loved ones really arrive in Haiti within minutes; they arrive in Haiti as Bonds, against which banks have no issues paying because the principal along with interests will never be lost due to changes in the financial markets.
What we see in Haiti right now is that businessmen and NGOs have more “actual paper money” than banks and the government, which lead to the shortage in local and foreign currencies in circulation in Haiti.
Okay, do you understand what I was trying to convey to you? Anyway, don’t be surprised if your bank denies your request to withdraw money from your own account. Instead, depending on the amount, they may elect to give it to you in installments.
Page One Magazine
It is not a scam; it is so true and in fact, such a situation is making national headlines as you are reading this post.
For what it is worth, your bank is not mismanaging your money or some employees did not steal so much that banks are having difficulties giving us some or all of our money upon requests.
This is what happens. Due to my lack of knowledge in Economic Sciences, I will have hard times making you fully understand the reasons behind Haitian banks not holding to their part of the bargain. I will not be using any technical terms to prove my point; I will use simple words; hopefully, you will grasp the main idea.
Okay, for people like us, money is this paper thing we carry in our pocket and ready to be cashed as fast as we crave for something but for big companies, money is a promissory note between a certain organization and its bank. It is a [negotiable bond] that states how much money an organization has and can spend whether in its home country or overseas.
Confusing; is not it? This is what I was trying to say. When an NGO says it has $1M to spend toward Haiti Earthquake Recovery; this organization is not really taking $1M to Haiti. In fact, it goes to Haiti with a piece of paper backed by the full faith and credit of its government treasury.
When it arrives in Haiti, it presents its piece of paper to any bank in Haiti, which will be more than willing to advance as much as Cash it needs to continue with its humanitarian efforts.
As such, NGOs are taking so much money against their bonds that Haitian bank reserves get depleted quickly and in a hurry, resulting in Haitians being turned down for money until their respective bank cashes NGOs’ savings bonds.
Since bonds, although worldly negotiable, must be exchanged by the issuing country, Haitians banks are then summoned to send these bonds to the issuing country in order to be converted into money as people like us know it. You see how long it can be before the actual money makes it to Haiti so it can be placed back into circulation?
Additionally, don’t assume money transfers you make to your loved ones really arrive in Haiti within minutes; they arrive in Haiti as Bonds, against which banks have no issues paying because the principal along with interests will never be lost due to changes in the financial markets.
What we see in Haiti right now is that businessmen and NGOs have more “actual paper money” than banks and the government, which lead to the shortage in local and foreign currencies in circulation in Haiti.
Okay, do you understand what I was trying to convey to you? Anyway, don’t be surprised if your bank denies your request to withdraw money from your own account. Instead, depending on the amount, they may elect to give it to you in installments.
Page One Magazine
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