Belarus’ gold reserves would grow only if net currency sales by population persist

According to the National Bank, as of March 1^st, 2017, Belarus’ gold reserves totalled USD 5022.3 million, i.e. increased compared with February 1^st, 2017 by USD 37.3 million. The last time Belarus’ gold reserves exceeded USD 5 billion was in January 2015. Amid deteriorating foreign trade, the increase in the reserves was due to borrowings by the National Bank and the Finance Ministry on the domestic currency market. Additional government securities in foreign currency are likely to be placed on the domestic market, and banks are likely to raise subsidized loans from consortia of foreign banks. Meanwhile, foreign trade situation is unlikely to improve. Lower interest rates on national currency loans unlikely not have a significant impact on currency demand from legal persons due to the lack of a sufficient number of reliable borrowers within the country. In January-February 2017, the population sold more than USD 290 million on a net basis. Artificial measures to boost people’s incomes could reverse this trend and without the net currency sales by the population, Belarus’ gold reserves unlikely to grow.