Emerging Markets Rates and Currencies Handbook

98 Citi | Emerging Markets Currencies Handbook 2021 Trade flows Purchases: • Daily, below USD 600k can be purchased directly from banks. • Daily, above USD 600k and up to USD 1.2 M can be purchased through the Central Bank FX auction market. Sellers: • No restrictions. Capital flows/ Foreign Direct Investment FDI inflows have to be reported to the Central Bank. The transfer processing instructions/description has to state that the purpose of transfer is for FDI. Interest rate markets Rates trading is mostly concentrated in the cash market. Bonds/Bills issued by the Honduras Government and the Central Bank are mostly bought by market participants (mainly banks and pension funds) as a buy and hold strategy. There is no swap curve, as the market has not yet developed a floating rate benchmark. Banks usually rely on the rpo and reverse repo market to address short term liquidity needs, as the secondary market for government securities is limited. Banco de Honduras, S.A. Intersección Bulevar Suyapa y Colonia Loma Linda Tegucigalpa, M.D.C., Honduras, C.A. FX Sales Contact: +504 22902154 Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equities Tax & Regulatory Overview W/H Tax 10% on interest payments 10% on interest payments No 10% on net settlement amount (Not on NDF) N/A Deductibility of Interests No Yes Yes Yes N/A Deductibility of (FX) Losses FX gain/loss only applicable to on-balance positions N/A Other Taxes, duties 0.20 % special tax on wire transfers to third parties N/A Honduras Item Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equity W/H Tax 10% WHT 10% WHT No WHT 10% WHT on net settlement amount NA Deductibility of interests Not deductible Fully deductible Not deductible NA Deductibility of FX losses FX gain/loss only applicable to on-balance positions NA Other taxes, duties 0.20% special tax on wire transfers to third parties NA Comments NA NA NA NA NA Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor. Source: Relevant legislation, publicly available sources. Subsidiary Funding — Tax Consideration Tax Summary — Honduras

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