Stanislau Bahdankevich: Belarusian ruble devaluation will go faster

The price growth rate in Belarus can be compared with that in war-hit Ukraine.

The National Bank of Belarus lifted restrictions on buying and selling foreign currency at the currency exchange. The restrictions on maximum amount of transactions were lifted until January 1, 2017. In accordance with the National Bank's decision No. 508, the mandatory information in requests for buying foreign currency at the currency exchange now includes “the maximum exchange rate of the foreign currency to fulfill the request,” BelaPAN says.

“Perhaps, they lift the restrictions to revive the Belarusian economy that stands still,” former chief of the National Bank Stanislau Bahdankevich says. “Maybe, Yermakova consulted with Miasnikovich and took a decision to ease control to revive foreign market.”

However, he thinks these measures will scarcely lead to an increase in demand for foreign currency and the weakening of the ruble. “Until recently, business has supplied its needs in foreign currency at the currency exchange. I do not thinks something will change radically,” the economist thinks.

Bahdankevich says he is surprised by the National Bank's inconsistency. “They try to set restrictions in the exchange market, but then they give more freedom to the exchange market and carry out a more liberal policy.” The greatest disadvantage, in his opinion, is the growth of prices. The price growth rate is “two times higher than in Russia and keeps at the same level with war-hit Ukraine”, he says. The devaluation of the national currency will go faster in this situation, he supposes.

The US dollar has risen against the Belarusian ruble by almost 10% since the beginning of the year.

The new rules of the National Bank that lift restrictions on the amount of foreign currency transactions at the currency exchange will not be applied to transactions by individuals.