Loans in Belarusian industry may create additional external and domestic risks
On August 3rd, the National Bank decided to reduce the discount rate from 20% to 18% as of August 17th, 2016. The decision was likely to had been lobbied by industries and aimed at stimulating the real sector. Thanks to this decision, the banking system is likely to reduce the proportion of problem loans. However, just before that the Eurasian Development Bank warned the Belarusian authorities against such measures: "Key interest rates should not reduce amid sustainable increase in the current account deficit, and persisting risks with financing a balance of payments.” Meanwhile, the current account deficit increased in January-May to 10.3% of GDP. Such an inconsistent relaxing of monetary policy may complicate the disbursement of the third tranche of the EFSD loan (USD 300 million). Domestic risks include additional pressure on the currency market, replenished stocks with illiquid commodities and deteriorated financial health of industrial enterprises.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.