Belarus is working to borrow $500 million and 5 billion from China for the sake of spending the money on investment projects.
The information was released by Chairwoman of the Board of the National Bank of the Republic of Belarus (NBRB) Nadezhda Yermakova during the online conference and the phone-in session arranged by BelTA on 18 September.
“The possibility is being discussed with the Chinese side, it is on the agenda, but the money will not be added to the gold and foreign exchange reserves. Instead it will be spent on investment projects that will generate foreign currency down the road. The foreign currency intended for these projects will be poured into the gold and forex reserves,” explained Nadezhda Yermakova.
“We will learn when we can get the loan after the contract is signed. We are willing to borrow $500 million and 5 billion. We need yuans in order to pay for the money we borrowed from China in the past for a number of investment projects. It is easier to return the loans in yuans,” said the NBRB head.
Asked about the level of the gold and foreign exchange reserves Belarus expects at the end of the year, Nadezhda Yermakova noted: “Reserves to last for two months of import are the target set in case any problems happen in the world so that we could buy critical imports, primarily energy resources. As of 1 September the two-month reserve totaled $7.7 billion. We have this kind of money. There are ways for forming reserves as large as two months’ worth of imports by the end of the year”. When development targets were being worked out for 2013, the initial target for the gold and foreign currency reserves was 2.3 months’ worth of import, said the official. “Now we see that in view of the situation on the currency market caused by lower export we cannot foot the bill, however, the two-month target is quite feasible and can ensure the national economic security,” she stressed.
Speaking about sources to tap into in order to replenish the gold and foreign exchange reserves, the NBRB head noted: “Several options to borrow abroad have been worked out”. She declined to give details. Yet Nadezhda Yermakova remarked that borrowing terms on the domestic market are now more profitable than the terms available on the foreign market. “The Finance Ministry has already borrowed over $600 million on the home market and there are plans to borrow even more. Banks profit by buying Finance Ministry bonds,” noted the head of the National Bank of the Republic of Belarus.