Barys Zhaliba: Belarus to face massive devaluation due to war

The Russian-Ukrainian conflict will hit Belarusians' pockets.

It was said by economics professor Barys Zhaliba.

The analyst forecasts in an interview with Salidarnasts how the Russian-Ukrainian conflict will affect Belarus's economy.

“The Russian ruble fell significantly against the dollar and the euro on March 3. This is the devaluation record of many years. The press called it Black Monday for the Russian ruble. Russia's central bank raised interest rates from 5.5% to 7%. I think the Russian ruble will drop further,” the economist says. “This is the avalanche process of the devaluation. The war with Ukraine, which was caused by absolutely inadequate, unreasonable, in my view, actions of the Russian leadership, will only accelerate the process.

Depositors (both in Russia and Belarus) may panic as military actions develop. They may convert their ruble deposits into foreign currency ones. It will undermine the bank resources for crediting the economy.”

Barys Zhaliba notes the Belarusian ruble rate cannot remain unchanged against the Russian ruble. A rapid massive devaluation is possible, the economist says.

“It will be followed by the growing inflation rate and a decline in living standards. Belarusians will fell the consequences of the Russian-Ukrainian war,” he is confident.

Oil and gas prices are stable yet, but they will increase due to the war, Barys Zhaliba thinks.

“On the other hand, what will be a reaction of the Western countries, which announced the strengthening of financial pressure up to an economic blockade?” the analyst says. “They can artificially reduce oil prices to hit Russia, as it happened in the 1990s. All are waiting for what Putin will do. If he comes to himself and stops military actions and seizures of Ukrainian facilities in Crimea, Western sanctions can be suspended. Russia returned us to the cold war, the state my generation had been living for decades.”