Tightening of the monetary policy

Category status:
April 22, 2016 17:55

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.

Comment

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.

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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.