Barys Zhaliba: “It all strongly resembles 2011 with its devaluations”

What is waiting for the national currency in 2014?

Since the start of the year Belarusian rouble has become 10% cheaper against the USD and almost 15% cheaper against Euro.

Salidarnasc asked PhD in economy professor Barys Zhaliba what in his view was the most probable course of further financial developments.

- We are entering the next year without loan support, traditional for our economy. This very much resembles the year of 2011 with its devaluations, - the economist believes. – In 2011 the crisis started, when foreign reserves reached the level of 5.8 billion USD. As for today the reserve is 6.5 billion and by macroeconomic estimations the critical level in the current situation will be 5 billion USD.

According to the expert, the authorities may support the exchange rate of Belarusian rouble up to this limit, spending foreign reserves on that.

- If there is the aim not to allow a one-time rapid devaluation, providing for that by the means of foreign resrves, then with the current rate of dollar’s exchange rate (roughly 100 roubles in two weeks) it may be predicted that the economy would sustain for three to six months. This means that it is possible to hold on until the Ice Hockey World Championship.

Barys Zhaliba assumes that in 2014 the authorities may only count on incomes from improved exports of potash fertilizers.

- This together with the sale of MTS and second part of Mozyr’s refinery provides for the opportunity of a gradual devaluation within half a year. But all these measures are extremely unreliable and at any moment may lead to the disastrous scenario of 2011. In order for this not to happen the president have to promptly fly to Moscow and beg for support, - the economist summarized.

Photo: Radio Svaboda