Stanislau Bahdankevich: Authorities try to stop purchase of foreign currency

The authorities tighten the noose around people's necks instead of carrying our a new economic policy.

Former chief of the National Bank Stanislau Bahndankevich explains to charter97.org why “Black Friday” cannot be called a classical devaluation and why the authorities imposed a 30% fee on purchasing foreign currency.

– It means that the government wants to prevent buying hard currency by people. I do not understand these measures. I think it was wrong to impose this tax. It only harms people. People just want to preserve the cost of goods amid distrust to the Belarusian ruble. Other measures are needed to calm people down. It is another tax on honest citizens.

– Why was it decided to take such strict measures? All economists, including you, warned several times that the ruble would fall.

– Everything we see in the Belarusian economy is consequences of the oil crisis in Russia. We need other measures, a new trade and economic policy, a drastic reduction in the ruble money supply. We should not give loans to ineffective state-run facilities and issue loans to make products that remain in stock because they cannot be sold in the foreign market. We should take measures to cut expenses and raise prices. Our trade should not be focused only on Russia. There's no global economic crisis. GDP is gradually growing in the world. The world is not in crisis. Russia is in crisis! Why have we faced such a situation? Who is to be blamed for the country's too strong financial dependence on Russia?

– Many expected a devaluation of the Belarusian ruble due to a sharp devaluation in Russia.

– The exchange rate could have been growing slowly if the government would have said clearly what it does to stabilise the situation. But it doesn't do it. I think the Belarusian ruble is overrated by around 10%. A devaluation is possible, but not as big as in Russia, where the ruble almost halved in value. Our ruble was devalued many times. Why don't we make conclusions from our experience? We need to devalue it again. I do not support a sharp devaluation. I stand for a comprehensive reform programme and a gradual devaluation of the national currency.

– Do you think the dollar won't cost 20,000 Belarusian ruble by New Year's Day, as many expect?

– I don't think there will be a fall before New Year's Day. The dollar will cost around 11,000 rubles. It would be wise, however, to make it 12,000 rubles. Yes, the actual exchange rate is more than 14,000 rubles a dollar, but 30% is a tax, which, by the way, is applied only to individuals, to those who buy currency. Those having foreign currency in their wallets or on deposits cannot sell it at this exchange rate. It is not a classical devaluation. It is a tax.