National Bank requires additional USD 1.5 billion to repay public debt in 2015

April 22, 2016 19:12

In Q1 2015, Belarus reduced its public debt by USD 262.3 million and made due foreign currency payments. Thanks to net sales of foreign currency by the population, gold reserves did not reduce by more than USD 500 million. Taxes on petroleum products and refinancing of debt by Russia would be the main sources for making the remaining public debt payments in 2015. 

The Finance Ministry has published data on public debt as of April 1st, 2015. In Q1 2015, Belarus’ public debt reduced by USD 262.3 million and totalled USD 12.3 billion. Belarus has fully paid off the IMF Stand-by loan, made her first payments within the EurAsEC Anti-Crisis Fund loan – USD 88.3 million, and repaid debts to Chinese banks. Non-state economic sectors also have reduced their external debts, including the banking system. Non-residents have reduced their assets in the Belarusian banking system by USD 373.3 million since early 2015. Before the year-end, Belarus has to repay USD 2.7 billion of external debts. 

Where did the money come from to repay Belarus’ public debt? In Q1 2015, gold reserves reduced by USD 500 million. Amid falling revenues, the population sold USD 281 million worth foreign currency. The Finance Ministry raised additional USD 88 million by placing foreign currency bonds on the domestic market. In Q 1 2015, Belarus raised USD 136 million in foreign government loans from the Russia and China. 

By the year-end, Belarus may raise addition USD 800 million from export duties on oil products, which have been listed to her budget as of early 2015. In addition, the population may sell additional USD 50 million per month in the coming months (due to the holiday season), which by the year-end could sum-up to USD 400 million. 

As for the remaining sum (USD 1.5 billion), Belarus hopes for refinancing from Russia – USD 700 – USD 800 million, including USD 110 million she received in late April 2015. In addition, Belarus may raise additional USD 200 million from placing additional foreign currency bonds worth about USD 500 million on the domestic market. Alternatively, Belarus may dip into her international reserves, i.e. making them critically low – less than USD 5 billion. The best case scenario is that the population continues selling foreign currency – circa USD 100 million per month. 

All in all, in Q1 2015, the National Bank made all due foreign debt payments by reducing gold reserves by USD 0.5 billion only. In the best-case scenario, Belarus will continue fulfilling its international obligations with the help of Russian loans and if the population continues selling their foreign currency savings on the domestic market thus not requiring Belarus to issue Eurobonds with high interest rates.

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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.