Devaluation of BYR in January will require new write off of losses in economy
As of January 22nd, 2016, BYR depreciated against the USD and EURO by more than 12%. Devaluation of the national currency is related to the fall in oil prices and weakening of the Russian rouble. Given the large proportion of Russia in Belarus’ foreign trade turnover, further dynamics will depend on the actions of the Central Bank with regard to the Russian rouble. Corporate currency loans in Belarus are likely to be revalued. Most Belarusian enterprises are likely to report losses in January due to exchange differences resulting from the revaluation of foreign currency liabilities. Importers may stop importing some goods due to unprofitability. In order to preserve budget proceeds from income tax, the government may require to list currency differences as deferred expenses, leading to distorted financial situation at enterprises, which, however, will help keep the budget revenues from significant adjustments.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.