The new head of the National Bank of Belarus and changes in the monetary policy

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April 22, 2016 17:57

Chairman of the Board of Belarusbank Nadezhda Ermakova was appointed as the new Head of the National Bank of Belarus. Before the appointment Ermakova reported to Lukashenko, that the banking system and the foreign currency market of the country have stabilized completely:

the foreign currency exchange rates set by the National Bank reflected the reality without being constrained by administrative tools and that there was an inflow of deposits. At the same time, she said that the day before in “Belarusbank” the outflow amounted to "only" USD 360,000 and Euro 300,000 which was insignificant in her view. Alexander Lukashenko instructed the new Head of the National Bank of Belarus to reach the single currency exchange rate of the Belarusian Ruble in the near future.

The National Bank of Belarus allowed Belarusbank, Belinvestbank, Belagroprombank, Paritetbank and Alfa-bank until 1 December 2011 to buy cash foreign currency without selling it to the population via foreign exchange offices located in recreational facilities (without specifying what stands for a “recreational facility”). Currency collected that way would be sold to citizens for social purposes.

The National Bank allowed the use of foreign currency in transactions between the residents in leasing agreements. This provision is valid until 1 January 2013. In autumn 2009 the National Bank canceled the use of foreign currency in a number of operations between residents, including leasing agreements. Several months ago a number of businesses appealed to the National Bank with a request to return the possibility of settlements in foreign currency.

Comment

Regardless of other candidates being more qualified and better experts, the authorities bet on a “gray mouse”, who knows banking very well however does not understand macroeconomics. Therefore the main criterion was loyalty rather than professionalism. Obviously, Ermakova will continue the existing policy of administrative regulation and redistribution. It implies that the credit (emission) support to individual enterprises will continue, as well as the sale of foreign currency to the population for "social purposes" only (traveling due to illness of a family member or linked to a funeral, treatment or in some cases studies). The National Bank has finally lost its independence: the monetary and exchange rate policy is now determined solely by the Presidential Administration.

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Belarusian and Ukrainian Defence Ministries entangle in confrontation spiral
October 02, 2017 11:57
Фото: RFRM

Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.

The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.

Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.

For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.

Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.

The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.

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