The  ban on exchange of the Belorussian rouble into foreign currency, including the Russian rouble, introduced last mid-March, has provoked the emergence of the “130% black currency market”, price hikes on foodstuffs imports and a surge of exchange rates offered by illegal operators, some of whom have already faced  court trials, and an entanglement in settling deals between private investors. Standard & Poor’s has given Belarus a “B” rating and “B+” for obligations in the republic’s national currency. S&P’s long-term forecast is negative, so it is not out of the question that Belarus may face a default and a devaluation.

Belorussian National Bank is not selling foreign currency to commercial banks. The long queues at the street and bank telling machines and currency exchange offices – including at the spa where I spent a fortnight, the central railway station where people literally scan potential bearers of the Russian roubles that go for  111 Belorussian roubles, were caused by the run-on on the banks, leaving them completely without foreign currency. Most of the companies that paid dollars to the staff for many years, except for the biggest ones, had to fix their wages in Belorussian roubles. Some companies sent their staff on leaves until the situation stabilizes.

Strange, but Anatoly Prokopovich, chairman of the Board of BelNational Bank says that his bank is drawing foreign credits to meet the demand, instead of investing them into the development of the country’s economy. His explanation of the bank run-ons is activities of provocateurs.

Importers would have to purchase forex over-the-counter. Their expenses would grow pushing commodity prices up. Foodstuffs prices have grown by 30% to 40% or even doubled.   

With the deep negative imbalance of the payment balance the country’s economy is in a critical state, when companies that use foreign currency being literally paralyzed, and the panicky population, deteriorates the situation. Unless Belorussian authorities manage to draw foreign credits of 1 billion dollars from Russia and 2 billion dollars from the European-Asian Economic council’s anti-crisis fund, they will have to resort to unpopular economic measures, including devaluation. Given the panicky sales of their national currency unites by Byelorussians the devaluation process has already started.

Analysts agree that Belarus has macroeconomic and political prerequisites for devaluation. But they stress that by 90% the problems are created by inadequate performance of the government and the National Bank.

Western analysts also view the Belorussian rouble’s devaluation as a soon-to-come phenomenon. The Finnish Danske Bank A/S analyst Sanna Kurronen views the Belorussian national currency situation as rapidly deteriorating with no reasonable alternative to its devaluation.

Last year, Belorussian gold and hard currency reserves fell by 33% to 2.9 billion dollars, with current operations deficit rising to 15.6 per cent. An average B.rouble to the dollar amounts to 3.5 thousand to 3.8 thousand. But there’s no making the transaction officially as banks say they have no hard currency.

Surprisingly, the society is still unperturbed and does not even indicate indignation over the situation.

Belorussians are believers in their government who hope that by the end of this month president Aleksandr Lukashenko will allow the Russian rouble to be their country’s national currency, making their lives brighter.

Vioce of Russia