29 March 2024, Friday, 9:44
Support
the website
Sim Sim,
Charter 97!
Categories

Uladzimir Kavalkin: Perhaps, Default Needs to Be Announced

49
Uladzimir Kavalkin: Perhaps, Default Needs to Be Announced
Uladzimir Kavalkin
Photo ONLINER.BY

Will foreign exchange reserves be enough to settle with creditors?

Belarus is getting deeper in the debt pit. According to the Finance Ministry, within four month an external debt rose by $652 million and now equals to $13.1 billion.

And funds to settle with creditors are bating day by day. In the past few years foreign exchange reserves (one of the main sources of repayment) decreased almost by half. Now they equal to $4.1 billion.

What will happen if they run out? Zautra Tvaye Krainy asked experts.

Kavalkin: Foreign exchange reserves will be enough only to repay debts for the third quarter.

According to the head of the Kosht Uradu project Uladzimir Kavalkin, to avoid the default the authorities are forced to borrow money because there is no own resources.

-If you compare the amount of payments for this year and the amount of the money in the budget aimed to pay debt, it becomes clear that it is not enough. The only way out is to keep borrowing money to cover old debts, the expert says.

There will be another challenge for Belarus in the third quarter.

- This is the high period to settle with debts. Further increase of the state debt can be expected, Uladzimir Kavalkin predicts.

The Belarusian economy is in recession, the expert stresses. The number of taxes received is getting lower as well. As consequence the budget has less means to service debts.

- The level of foreign exchange reserves is extremely low. They will be enough only for 1.5 month of import to the country. A normal index is 3 months of import. If the government finds no money, either default should be announced or forex reserves are to be the way of settlement of debts. But it will be enough only to repay debts for the third quarter.

If the foreign exchange reserves drop to the critical level, it will be necessary to take unpopular steps, which seriously affect ordinary citizens.

— The government will have to seek borrowings in the domestic market or take restrictive measures related to the financial system, or, again, if it comes to the worst to announce default, but, I hope, it is the least possible variant, the expert says.

Write your comment 49

Follow Charter97.org social media accounts