Belarus may refinance domestic debt to save gold reserves

As of November 1^st, 2015, Belarus’ gold reserves totalled USD 4.66 billion, which is USD 38.1 million more than on October 1^st. The gold reserves have increased due to currency proceeds from the bond sales issued by the National Bank and the Finance Ministry – in October the National Bank raised USD 257 million and EUR 147.5 million. This instrument will be used in the future to refinance Belarus’ outstanding public debt. The demand for these bonds will remain high due to high yield (7-8% per annum). In addition, interest rates on foreign currency deposits for the population may rise too in order to attract currency savings of citizens to the banking system. This refinancing mechanism is effective when repaying short-term debt. In order to repay public debt in full, Belarus requires long-term loans worth at least USD 1 million at the minimal interest rate.