Foreign currency exchange: expansion of the currency corridor
On 12 May the National Bank of Belarus expanded the corridor for the Belarusian ruble rate deviation against a basket of currencies (US Dollar, Euro, Russian ruble) from 8% to 12%.
Expansion of the corridor was the right decision, it made the exchange rate policy more flexible, however, it was insufficient, given the balancing rate was far above the upper margin level set by the National Bank.
Plurality of exchange rates distorts the economic picture and has negative impact on both, importers and exporters. Moreover, it affects insurance, leasing, construction and other companies, as their customer contracts are tied to the official exchange rate. Currency risks and uncertainty lead to higher prices and to degradation of variety of goods.
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.