EurAsEC Loan

April 22, 2016 17:54

On 9 June a loan agreement was signed with the EurAsEC for $ 3 billion with interest rate of 4.9% per year for 10 years, a grace period of repayment of principal debt is 3 years. The first tranche is expected this week.

Comment

The delayed loan decision and its allocation in tranches do not allow for its effective use for the purposes it was requested i.e. to stabilize the currency market and to delay privatization.

The first tranche of the loan will be used as a lever to obtain other loans, given the first tranche will be spent on the GCR.

The National Bank has to carry out accurate interventions at the Foreign Exchange and a part of the loan will be spent on these purposes. However there will be little effect from these interventions and the exchange rate will not stabilize.

It is obvious that the leadership understands the poor effect of the EurAsEC loan, and that is why, immediately after the information about it the authorities spread information about another USD 1 billion to come from another source. In its attempts to bring down the devaluation expectations the government spreads the most incredible rumors (as if it will come from Turkmenistan or Israel), while the only plausible source of new billion is co-owner of Uralkaliy Suleiman Kerimov.

Similar articles

Minsk hopes Warsaw would revise decision regarding ban on electricity supply from Belarusian NPP
April 17, 2017 13:03

Last week, Belarusian Foreign Minister Makei participated in the foreign ministers’ meeting of the Eastern Partnership and Visegrad Group initiative hosted by Warsaw. The Belarusian FM emphasized Belarus' interest in cooperation in the transport sector, which could be due to Belarus’ desire to export electricity surplus after Belarus finished construction of the nuclear power plant in Ostrovets. Minsk expressed concerns about Warsaw’s stance on the Belarusian NPP, as it refused to buy electricity from Belarus and supported Vilnius’ protest on this issue. Following accusations by the Belarusian leadership and the state media against western states, including Poland, of training "nationalist militants", Minsk did not agree on the visit of the European Parliament deputies from Lithuania and Germany to Belarus and to the NPP construction site near Ostrovets in particular. In addition, the Belarusian authorities have stepped up efforts to enforce education in Russian in Polish-language schools in Grodno and Vaukavysk. Should a rift in Belarusian-Polish relations persist, the Belarusian authorities are likely to step up the pressure on the Polish-speaking minority in Belarus.