The government plans to reach a balanced exchange rate in October

April 22, 2016 17:59

The Government and the National Bank expect to eliminate the multiplicity of exchange rates in October, with a balanced exchange rate at a level between the current official and the market rates. Thereby they hope to resume negotiations with the IMF on a new stabilization loan.

The Government and the National Bank expect that the multiplicity of exchange rates on the Belarusian foreign exchange market will be eliminated in October, with a balanced exchange rate at a level between the current official and the market rates. This will restore the confidence in the Belarusian ruble, which, in turn, should affect the inflow of deposits to the banks and those funds could be used for loans to the state programmes.

The Vice Premier said that the main stumbling block during the discussion of the new program was the lack of user-friendly exchange rate, which prevented Belarus from beginning of full-fledged negotiations. Mr. Rumas assured that with the opening of the supplementary trading session on the BSCE, this problem would be solved and added that the IMF welcomed the measures undertaken to counteract multiple exchange rates.

This was announced at a press conference on 21 September by Deputy Prime Minister Sergei Rumas. In addition, Belarus intends to intensify negotiations with the IMF on a new Stand-by programme. For instance, the government delegation flew to Washington to attend the annual meeting of the IMF and to negotiate the assessment of the macroeconomic situation in the country. The Vice Premier said that the main stumbling block during the discussion of the new program was the lack of user-friendly exchange rate, which prevented Belarus from beginning of full-fledged negotiations. Mr. Rumas assured that with the opening of the supplementary trading session on the BSCE, this problem would be solved and added that the IMF welcomed the measures undertaken to counteract multiple exchange rates.

Comment

The Government needs the IMF loan in order to maintain the gold reserves at an adequate level, and for external guarantees. The loan will bring down the current high rate of the Belarusian Eurobonds, and will help to return deposits into the banking system. Moreover, it could act a “safety cushion” while negotiating with investors the privatization of Belarusian assets on equal terms (currently a number of investors, primarily Russian, have stronger negotiating position).

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.