Belarusians to pay high price for dictatorship's currency loans
89
14:48, — Economics
Dictatorial Belarus takes high interest loans.
Government's excessive interference with economy and the political situation in the country, described as Europe's last dictatorship, cost much for the Belarusian economy, also taking into account currency loans and credits (including Eurobonds).
Efforts to spruce up the investment image and simplify business administration as well as stabilization programmes and matrices do not lead to the decrease in cost of the country's foreign borrowings, AFN news agency reports.
The Belarusian government was reported in late September to have agreed with Russia's Sberbank on prolongation of a $1bn loan to Belaruskali potash company. No one doubted the possibility of prolongation, but the conditions reflecting the current risk adjustment factor attracted everybody's attention.
The loan was prolonged for three years at 8.2% interest rate (to compare, the Libor rate, used by leading banks and countries with normal reputation to take out dollar loans, is about 1%). By the way, Greece and Spain pay less for their huge infusions of loans.
Andrei Kharkavets, the Belarusian Minister of Finance, said yesterday the Ministry of Finance of Belarus had sold Belvnesheconombank an issue of 3-year long coupons denominated in foreign currency at a sum of $100 million.
“It was a test deal, We will try to talk to investors. We will continue if we see their interest in the instrument,” Kharkavets said yesterday. He refused to say the coupon interest rate.
However, the interest rate, which will be used as a landmark for further foreign loans, is not a big secret. It is 7.5%. Coupon interest will be paid twice a year.
As a matter of fact, 7.5% is the indicative minimum. Lower interest rates are highly unlikely to be proposed by possible investors (banks). The approximate cost of foreign loans that can be expected by the Belarusian government will most likely be estimated at 7.8-8.5%. Serving foreign and internal currency debts at these interest rates demands big money, which Belarusian tax-payers will have to pay out of their pocket for many years.
Write your comment (89)
News
on topic
Export
Íîâîñòè ïàðòíåðîâ
