The new head of the National Bank of Belarus and changes in the monetary policy
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.
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.
Last week, Belarusian Foreign Minister Makei participated in the foreign ministers’ meeting of the Eastern Partnership and Visegrad Group initiative hosted by Warsaw. The Belarusian FM emphasized Belarus' interest in cooperation in the transport sector, which could be due to Belarus’ desire to export electricity surplus after Belarus finished construction of the nuclear power plant in Ostrovets. Minsk expressed concerns about Warsaw’s stance on the Belarusian NPP, as it refused to buy electricity from Belarus and supported Vilnius’ protest on this issue. Following accusations by the Belarusian leadership and the state media against western states, including Poland, of training "nationalist militants", Minsk did not agree on the visit of the European Parliament deputies from Lithuania and Germany to Belarus and to the NPP construction site near Ostrovets in particular. In addition, the Belarusian authorities have stepped up efforts to enforce education in Russian in Polish-language schools in Grodno and Vaukavysk. Should a rift in Belarusian-Polish relations persist, the Belarusian authorities are likely to step up the pressure on the Polish-speaking minority in Belarus.