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.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.