New Eurobonds will be issued to repay previous borrowings
As of June 19th, 2017, Belarus is planning to conduct a road show of Eurobonds nominated in USD in the US and Europe. Citi, Raiffeisen Bank International AG and the Development Bank of Belarus will be the organisers, the total issue volume could be up to USD 1 billion. Bonds maturity period would be between 5 and 10 years, taking into account the absence of problems with the settlement of external liabilities. The demand is expected to exceed the issue, the interest rate could be 5% to 6% per annum depending on the maturity, and some bonds could be bought out by organizations and trust funds located in Belarus. Most funds raised from the bond issue would be spent to repay Belarus’ Eurobonds with 7-year maturity period, which expires in January 2018. The remaining funds would be transferred to international reserves and used to repay other external liabilities.
The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.