Deposit auction on Belarusian Stock Exchange would boost corporate proceeds by reducing banks’ profitability

As of March 21^st, 2017, the Belarusian Stock Exchange introduced a daily market for exchange-traded deposit auctions for legal entities. In Belarus, legal entities have a limited set of financial instruments to make free foreign currency profitable. The new market opportunity would allow enterprises to establish the desired level of return on their own funds and on their terms. The interest rates on corporate deposits are likely to grow; foreign currency deposits in the banking system are likely to increase due to higher interest rates on the deposit market; and the banking sector profitability is likely to decrease due to a reduction in the banking margin for deposit and credit operations. The expansion of the deposit auctions market with the possibility of raising funds from individuals could lead to an increase in the currency deposits, a complete reformatting of the deposit market for large investors and their reorientation towards auctions.