Leanid Zaika: Real dollar cost is Br25,000

The economist does not rule out one more sharp devaluation in the near future.

Foreign cash appeared in exchange offices at the end of January, dollars can be bought with online banking, and the dollar sometimes gets a little cheaper against the Belarusian ruble (but then rises again). Experts and economists spoke to Euroradio about their forecasts regarding the ruble rate and a further devaluation.

“The exchange rate will change firstly, due to demand and supply and secondly, due to mutual fluctuations in foreign markets, taking into account that the dollar grows against most currencies of the world, including the Russia ruble and the euro. This trend is likely to continue,” says Vadzim Iosub, a financial analyst of the official partner of Alpari in Minsk.

The dollar will grow despite all measures taken by the authorities in the same way it grows now despite the strength or weakness of the Belarusian ruble. The euro drops against the dollar, so the the ruble/euro exchange rate will grow, though not so rapidly as the ruble/dollar rate.

Austerity measures taken by the authorities.

“It's a trick. Not to hit people directly, the government decided to hit companies. Bad performance of companies will lead to the lack of growth in income of people. Their income will even decline in real terms. It will happen because the salary fund depends on productivity, the ratio of returns to working days,” economist Siarhei Chaly says.

He adds that 2015 is the year of elections, so the decisive austerity policy proposed by National Bank and the government can quickly change to the opposite. The country's leadership need to have guarantees that people will vote as the authorities want, so high salaries and pensions are necessary. In this case, the situation of 2011 can repeat in winter or spring 2016, Chaly thinks.

Don't relax. Another rapid devaluation is possible

Economist Leanid Zaika points at another problem. Prices in Russia in dollar terms remain lower than prices in Belarus.

“The most serious problem now is the ratio of purchasing power of the Belarusian and Russian rubles. In dollar terms, prices in Russia are much lower than in Belarus. Reverse flows are likely to appear in the Customs Unions in this situation. It means that meat, milk, TV sets and even cars will be imported to Belarus from Russia,” Zaika is confident.

He thinks it's too early to relax. The real dollar rate that would rule out a further devaluation of the Belarusian ruble is Br22,000-25,000, Zaika thinks.

The future doesn't look optimistic. The first variant is that prices grow and salaries fall. It gives a more or less stable situation in the currency market and a slow growth of the dollar. The second variant is that prices grow but salaries grow, too. In this case, another devaluation is highly probable.

“What should be done?” – economists advise.

– Monitor the Russian ruble rate. The Belarusian ruble depends on it more than on events in the middle of December 2014. Fluctuations in the Russian ruble exchange rate will hit Belarus.

– Keep your savings in dollars, if possible. Increasing your own gold and foreign currency reserves will be much harder this year.

– Be careful will long-term ruble deposits. Practice shows that even high interest rates do not guarantee you'll have your money in case of another devaluation.