Barys Zhaliba: Foreign currency will end by new year

The beginning of 2014 will be painful marked with a lack of foreign currency.

Economist Prof. Barys Zhaliba spoke to charter97.org about Belarus losses due to the “potash war”.

“The Ministry of Finance speaks about 600 million dollars. It is a big sum itself and it is big for Belarus. We need to take into account the current state of the Belarusian economy. The country hasn't received the last tranche of the loan from the EurAsEC Anti-Crisis Fund that was to be received by October 29. I doubt we will have it by the end of the year, because Russia already delayed tranches before. It may be an effect of the potash war. We also shouldn't forget about the lack of foreign currency from selling oil products. I think, and many people have the same opinion, that it is also a consequence of the potash row. Russian deputy PM Dvorkovich said in September Russia would cut oil supplies. It was done. Instead of expected 5.75 million tonnes Russia will deliver 3.1 million tonnes that won't exceed 20 million tonnes a year. If we sum up these losses of the potash war, we will get not less than a billion dollars in the situation when we have to count every cent,” the economist is convinced.

The expert says the country is in great need of foreign currency. It has to pay the debts by the end of the year and fill exchange offices with foreign currency to prevent panic among people.

“The losses of the potash war influence and will have even more influence on the economic situation next year. There are no foreign loans that make our economy survive. The same situation was in late 2010. The crisis came in spring 2011 because we didn't have loans. Russia won't give us a loan at the beginning of the next year. It is a consequence of the potash war. Russia says negotiating on a new loan is impossible until Belarus gets the last tranche. I think the beginning of the next year will be painful marked with a lack of foreign currency. If we don't have foreign aid in the first half of 2014, we will have a currency crisis like in 2011. It is very dangerous. Both the government and the National Bank know it, but put on a brave face promising to settle the situation. But the situation with foreign currency remains strained. There will be foreign cash in exchange offices by the end of the year and the gradual devaluation of 100 rubles per month won't change, but it is a question what will happen at the beginning of the next year,” Barys Zhaliba said.

We remind that the Ministry of Finance says that cuts in potash fertilizers export in 2013 due to a breakup between the Belarusian Potash Company and Uralkali will result in Br5.9 trillion of losses of the consolidated budget.