Since 2005 the value of the Honduran lempira has been fixed at 18.95 to the dollar. This came about after years of rapid inflation and lent some stability and predictability to the Honduran economy. The Banco Central de Honduras announced that as of Monday the lempira will again float. Its price will be set by demand for lempiras at auction once a week. The Central Bank has set the initial auction price on Monday at 18.8951, a slight increase in the value of the lempira.
While the lempira gains in value against the dollar, it will be cheaper for Hondurans to import foreign goods, but their exports will be more expensive for the rest of the world to buy. If the value of the lempira decreases with respect to the dollar, imports will be more expensive, but their exports will get cheaper.
By allowing the lempira to float again, the BCH allows the market to set its value, which currently they see as better than the old official exchange rate. However, this may well lead to devaluation if/when the US Congress acts to raise the US debt ceiling and reduce the volatility of the dollar.Any source
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