Tightening of the monetary policy
The National Bank of Belarus stopped providing resources to commercial banks in the Belarusian rubles in exchange for foreign currency (in swap transactions, exchange deposits, etc).
At the same time the National Bank restricted issuing of loans by the state banks and increased their costs significantly in order to reduce pressure on the currency market.
The government ruled not to raise the base wage rate (effective as of 1 November 2010 and amounting to Br 118,000) before the end of the year. However wages will be adjusted in accordance with the inflation rate. In addition, the government intends to make a one-time payment to low-income retirees.
These solutions aim to reduce the supply of money and obligations to the Anti-Crisis Fund of the EurAsEc. These actions of the Government and the National Bank will certainly have a desired effect however they will not provide with a sharp reduction of money supply and will not save budget from the deficit. Another unpleasant decision the authorities should make in the very near future is to raise tariffs for housing utilities.
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.