National Bank is likely to continue to lose international reserves without large loan from Russia

In January 2016, Belarus’ gold reserves shrunk by USD 149 million to USD 4.0268 billion, despite the fact that the National Bank had managed to raise additional USD 1 billion on the domestic market through bonds issue for legal entities. Belarus’ foreign trade deficit is still very high. In the next two months, the government will require an additional USD 1 billion to refinance its domestic and foreign debt. Without a loan from Russia, Belarus’ gold reserves will continue to dwindle. Prices on imported goods will go up and the national currency will continue to depreciate. The population will continue to exert pressure on the foreign exchange market by converting rouble deposits into foreign currency. Even if Belarus manages to agree on the IMF loan, it will be allocated in tranches of USD 750 million each with the first one arriving not earlier than April-May 2016.