Allotment of loans is sharply reduced
The National Bank of Belarus unofficially advised commercial banks to suspend the allocation of consumer loans for the population due to high interest rates and increased risks, as well to reduce the share of foreign currency loans in their credit profile. As a result, it could imply a temporary ban on provision of any loans for the population.
Belarusian ruble deposits in banks decreased by 19.4% during the past 9 months. On October 1, 2011 the amount of Br deposits of the population constituted Br 19.9 trillion and foreign currency deposits USD 3.6 billion. Household deposits in local currency in January-September 2011 decreased by 27.9% or by Br 2.5 trillion. Foreign currency deposits in January-September 2011 reduced by USD 823 million, or 18.8%.
In October the gold and currency reserves of Belarus, calculated by the IMF standards decreased by USD 84.8 million.
In October the gold and currency reserves of Belarus, calculated by the IMF standards decreased by USD 84.8 million. Preliminary data for November 1, 2011 said the GCR amounted to USD 4631.0 million. The NBB plans to replenish the treasury in 2012 by $ 1.5 billion at the cost of the integration discount on the gas price. Moreover, in 2012 the NBB counts on the proceeds from privatization ($ 2.5 billion) and funds of the EurAsEC ACF ($ 880 million). With the expected positive balance of foreign trade amounting to USD 1.8 billion in 2012, the increase of the GCR is projected by the NBB at USD 1.6 billion.
An immediate action to increase the GCR is a must, given the scale of debt payments due by the government and the National Bank in the medium term. In 2012 - 2014 the Ministry of Finance and the National Bank will have foreign and domestic liabilities up to $ 8.9 billion (in 2012 foreign debt repayments will amount to $ 1.7 billion, or 3% of the GDP).
The NBB is aware of the growing risks and imbalances in the banking system and tries to prevent them, also by using the administrative measures. At the same time, the National Bank, as well as other governmental bodies, has to stabilize the social tension within the situation of ongoing economic crisis and rising interest rates on loans, resulting in the increased number of bad debts and the failure of the population to repay the loans at the new rates. One of the solutions is a temporary de facto ban on loans to the population until the rates become positive and lower.
The National Bank, as well as other governmental bodies, has to stabilize the social tension within the situation of ongoing economic crisis and rising interest rates on loans, resulting in the increased number of bad debts and the failure of the population to repay the loans at the new rates.
The plans to increase the gold reserves by $ 5 billion in 2012 are questionable. This also applies to the expected positive balance of foreign trade, and proceeds from privatization. Moreover, the projected growth will not cover all of the foreign currency liabilities in 2012-2014. Therefore the NBB should seek for the new sources of foreign currency proceeds. The ideal solution would be a new IMF loan, since its basic requirements do not concern the monetary policy directly. However it will require changes in the real sector and in fiscal and social policies and will have a strong impact on the very basis of the Belarusian economic model, which is not acceptable for Mr. Lukashenko. Nevertheless the NBB favours the new loan agreement with the IMF.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.