New hysteria around foreign currency

In Belarus demand for foreign currency has increased in all market segments in May compared to April 2012, which resulted in a rapid increase of non-resident demand and a drastic decrease in sales by Belarusian businesses and population.

According to the Belarusian National Bank, in May non-residents purchased $ 150,1mln, compared to $ 65mln in April and $ 28,8mln in March.

The increase in foreign currency purchase by non-residents in May is a result of the demand that has grown with 29,4% since April making $ 189,3mln, while sales have fallen with 51,8% making $ 39,2mln. After 5 months of the current year, non-resident demand for currency equals $ 252,5mln, calculated as a difference between the $ 741,8 mln gross purchase (increase of 20,3% compared to January-May 2011) and the $ 489,3mln gross sales (a 52% increase).

In May, Belarusian businesses bought only $ 61mln of foreign currency, which is much less than $ 335,1mln bought in April, $ 243mln in March and $ 131mln in February. In May Businesses made gross purchase of $ 1978,5mln (an increase of 19,5% compared to April) and gross sales of $ 2039,5mln (an increase of 2,4%). After 5 months of the current year, there is a steady supply of foreign currency from residents-legal entities, which equaled $ 957,6mln against the pure demand of $ 534,1mln in January-May 2011. Gross sales of foreign currency by businesses increased with 34,1% reaching $ 9,33bln; gross purchase increased with 11,8% and equals $ 8,37bln.

Belarusians are selling less foreign currency: $ 123,5mln in May against $ 210,3mln in April,$ 126,7mln in March and $ 194mln in February. In May, the gross demand of physical entities grew with 34% reaching $ 454mln, while the gross supply grew with 4,8% reaching $ 577,5mln. After 5 months of the current year, physical entities have sold $ 868,8mln cash against $ 442,5mln of supply in January-May 2011. During these 5 months, foreign currency cash gross purchase by physical entities have decreased by 36,5% and equals today $ 1,75bln, while the gross sales have increased with 13% making $ 2,62bln (in April-October 2011 Belarusians couldn’t buy foreign currency cash freely).