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Flows of Money
A significant amount of monetary exchange is involved in cross-border goods and services transactions—more than $6 billion in goods and services in 2003. Of this amount, exported goods accounted for $1.37 billion, while imported goods accounted for $2.80 billion. Exported services accounted for $1.09 billion; and imported services, for $687 million. Free zones accounted for $560 million (51 percent) of the services exports, which are included because they are a value-added category. Tourism constitutes another $291 million (27 percent) of the services exports. Remittances also represent a major trade-related financial flow. In 2003 an estimated $600 million to $800 million poured into Honduras through the remittances of Honduras workers and families abroad.
Overall, Honduran laws, public institutions, and private institutions support these trade-related money flows. Basic trade finance products are available to all traders. Foreign currency is widely available and easily exchanged for all traders. However, anything but the shortest term credit can be very difficult to obtain because of high-risk premiums that reflect serious structural issues, such as the recovery from the recent bank crisis, little real competition in the financial services market, a poor judicial system, and little private production capacity.
As are other CAFTA members, Honduras is challenged by illegal money flows. However, recently, the country has succeeded in pursuing and prosecuting money launderers.
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