Country’s gold reserves reach critical level

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April 22, 2016 18:00

Belarusian gold reserves risk to become de-facto negative if urgent privatization is not held or loans are not obtained. Therefore Belarus will have to fulfill its obligations, in particular, the three year privatization program worth $ 7.5 billion.

Approximately 74% of the national currency reserves are due the National Bank of Belarus foreign currency debt to commercial banks of the country. On 1 October the GCR of the National Bank of Belarus amounted to USD 4.715 billion, USD 3.5 billion of which is its debt to the banks. The NBB has been using SWAP transactions for a period exceeding 12 months, thereby saving the National gold reserves from drastic decline over the past years (mostly in 2010). The NBB received foreign currency loans from the banks in exchange for the Belarusian rubles on conditions very profitable for the banks. As of 1st September the loss of the National Bank from such operations reached Br 9 trillion. Under the loan agreement with the ACF of the EurAsEC Belarus has to reduce the foreign currency debt to the banks at the expense of prolongation of contracts due to expire.

On 1 October the GCR of the National Bank of Belarus amounted to USD 4.715 billion, USD 3.5 billion of which was its debt to the banks.

Comment

Belarusian gold reserves risk to become de-facto negative if urgent privatization is not held or loans are not obtained.

The National Bank expects to receive a USD 1 billion loan from Russian Sberbank, which will be used to replenish the GCR. Also Belarus hopes to receive the second transaction of USD 440 million from the EurAsEC Anti-Crisis Fund.

Therefore Belarus will have to fulfill its obligations, in particular concerning the three year privatization program worth $ 7.5 billion.

Projected budget revenues this year: USD 2.5 billion from the sale of “Beltransgaz”, from increased public transport tariffs, utility services, etc. It is anticipated that by the end of the year the population will reimburse 30% of the housing services costs and 35-40% next year (currently the population pays about 20.8% of the utilities cost). The government also plans to raise public transport fares, petrol prices, as well as to introduce differential pricing policy on water and electricity consumption.

The government will not be able to continue implementing the existing policies in the long term and a painful shock of structural reforms is yet to come.

However these measures are insufficient and the government will have to continue negotiations with the IMF on a new Stand-by Programme, which will inevitably require implementation of painful reforms in exchange for conditional step-by-step loan transfers.

Therefore the government will not be able to continue implementing the existing policies in the long term and a painful shock of structural reforms is yet to come.

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Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.

The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.

Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.

For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.

Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.

The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.

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