Gold reserves will maintain at USD 8 billion if there is stable inflow of international loans

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April 22, 2016 18:25

Despite the negative external payments balance, including the duty payments on oil products, the National Bank managed to maintain the international reserves around USD 8 billion. This was facilitated by external loans of the banking system and a certain safety margin gained in the early 2012. To continue maintaining the gold reserves at this level would be difficult without external loans.

On January 25th, the National Bank published data on receipts and payments for goods and services in 2012.

In December 2012, Belarus had to repay USD 315 million debt. She also repaid other internal and external obligations. In December the international payments deficit, including oil products duties, was USD554 million. Amid substantial net foreign exchange expenditures, the gold reserves reduced by only USD 112.6 million. The difference had been covered by the banking loans and by the National Bank’s foreign assets which were not included in the gold reserves.

In December, the banking system has reduced the net foreign assets by USD 531.1 million. The main reason was to attract loans from non-residents. The National Bank has reduced its net assets by USD 568.5 million. Not all National Bank’s assets are part of the gold reserves. According to the National Bank, foreign currency deposits are not included in reserve assets, in December they have reduced by USD 296.3 million. These assets have been accumulated in Q1 and Q2 of 2012 and reached a maximum of USD 2.1 billion. This safety margin allowed the National Bank to fulfil its internal and external obligations after the solvent schemes halted and foreign trade in goods and services deteriorated.

In January, USD 400 million debt payment is due. External trade deficit will not allow paying off this international debt from own sources. The EurAsEC Anti-Crisis Fund loan tranche has not been received due to technical reasons. The new issue of bonds for individuals by the Finance Ministry is minor and will not save the unfolding situation. Either the National Bank or commercial banks need new loan intakes.

In January, the National Bank may use the remaining reserves which are not included in the reserve assets, to maintain the gold reserves’ level. However, the safety factor is low. Since the situation with foreign trade will not improve significantly, new financial inflows are needed. So far, the banking system has been successful in attracting foreign loans, but it is impossible to count on this factor only: even if they wanted, the banks would not be able to ensure a constant inflow of USD 500-600 million. Repayment of international debts requires international loans inflow otherwise the National Bank would have to dip into the gold reserves, which is undesirable.

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President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.

President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.

The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.

The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.

The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.

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