A Serious Threat of Deposit Pyramid Downturn

Bank deposits of Belarusians have been decreasing for the seventh months already.

Heorhi Hrits, Deputy Director on Science of the Center of System Analysis and Strategic Research of NAS of Belarus, states in weekly paper Belarusians and Market: "The Belarusian economy deadlocked, all the measures taken to get out of the crisis will be unpopular. Huge payments on external borrowings in the 1st quarter give more troubles to the situation.

In addition, there is very serious threat of a deposit pyramid downfall that was created by the National bank in times of Petr Prakapovich. In principle, the regulator's desire to reduce the amount of short deposits is logical, because such deposits jeopardize the monetary system as a whole even in the short term. International Reserves of $4.6 cannot be a safety airbag. The International Reserves must be three times higher then..."

The dynamics of bank deposits of the population prove words of Heorhi Hrits. Bank deposits in national currency have been decreasing for the seventh months in a row. In December about Br1.3 trillion were withdrawn, it makes up 5% of the total volume of deposits in national currency. From June 1 to December 31 the population withdrew Br9 billion. It can be also explained with a permanent devaluation that discredited depositors' faith in ruble deposits, decrease of real incomes of citizens. It presses them to spend savings.