New ban on currency purchases imposed

The government and the National bank are inventing new ways of limiting the foreign exchange market of the country.

In accordance with the resolution of the Council of Ministers of Belarus and the National Bank as of February 25, 2011 #240/5 “On Settlement of Accounts in Some Goods Imports”, imports of equipment under foreign trade contracts for sums over 50,000 Euro in equivalent is carried out exclusively at the expense of the earnings the importer has in foreign currency and other foreign currency (contributions to the authorized fund, foreign gratis aid, dividends and other revenues from investments and so on) and also foreign currency received under loan agreements with non-residents and Belarusian banks for a term less than 1 year.

Purchase of foreign currency by economic entities for transactions with non-residents in equipment imports is possible only under foreign trade contracts which sum is less than 50,000 Euro in equivalent.

“It should be noted that this measure is aimed at limiting foreign currency demand by economic entities-residents, which implement large-scale investment projects, who should seriously work through their economic expediency, and sources of payment (currency returns, currency loans from Belarusian banks or external financing). Simultaneously, for small and medium business enterprises a possibility remains to buy imported equipment for sums no more than 50,000 Euro in equivalent, both at the expense of the abovementioned sources and the currency bought in the home market,” the National bank source said.

Besides restrictions for foreign currency demand from the side of the resident business entities this step, which is provisional and is imposed till March 1, 2012, is to stimulate increase of investment projects efficiency, for which equipment is bought (from the point of view of their export-orientedness and currency payback), expanding of use of different new instruments of payment for imported equipment; structural reforms, including the ones due to setting up joint ventures with non-residents and making investments by non-residents in the form of necessary equipment.