Kapeykas At A Cost Of Millions Dollars

What the denomination will result in for the Belarusians.

The Belarusians will hold the new money in their hands already next week. Not only the state, but the business as well had to pay a big sum to prepare for the denomination, naviny.by writes. What will be the effect of the country’s transfer to the new money?

State saves, business pays

It is presumed that, at the moment of July 1, 2016, when the new money appears in the country, about 600 million bank notes of the old nominal range will be in the turnover. About 80 million of new bank notes will be needed to replace them. Thus, as a result of the denomination, processing of the new cash will cost seven times less, according to the National Bank’s calculations.

Alongside with bank notes, 400 million coins will appear in the turnover since July 1. According to the official calculations, transfer to coins will also help the state to save, because the endurability of bank notes of small nominal makes 6-12 months, while endurability of coins makes 10-15 years.

The sum that the state paid for making new money back in 2008-20009 is not revealed. Nevertheless, despite the expenses, the state considers denomination a reasonable procedure — the economic agents (people in the first place), as the authorities claim, most positively perceive the monetary units with less zeros.

Already by the end of next week, the new monetary objects should arrive to the commercial banks, thanks to which the new currency will be available to the enterprises and the population.

The commercial banks had to input a lot of efforts and finances to prepare for the denomination.

“The expenses for the “metal” weren’t overwhelming — up to $ 100 thousand. It was much more expensive to update the software. It turned out it needed drastic changes, because of kapeykas which appear in the turnover again,” — a representative of one of the banks has said.

According to the participants of the financial market, even the relatively new automatic systems used by the banks, did not provide for account of operations with kapeykas.

“The Belarusian banks have worked with slump numbers for a long time. The automatic bank system, the operations concerning the interbank interactions, have been set the way to take any comma as a mistake,” — says BelaPAN news agency’s expert in the financial circles.

The banks had to pay a serious sum of money to update the software in connection with the denomination.

According to BelaPAN, direct expenses of the banks, connected with preparation for the denomination, made $ 500 thousand – 1 million (the expenses of every separate bank varied depending on the scope of the business, the state of the software and the infrastructure.)

Apart from the direct expenses, connected with the denomination, the banks had to suffer other charges as well.

“The imputed charges happened because of the impossibility for the banks to introduce new products during the last six months before the denomination. It remains problematic to introduce new products and prepare them for the denomination at the same time, so, de-facto, they had to freeze the business development plans in the pre-denomination period,”, — states BelaPAN news agency’s expert in the financial circles.

Kapeykas to arrive (not) in time

The Belarusian entrepreneurs dislike expanding expenses, especially in the current economically difficult times. Therefore, we failed to find those who had a positive attitude to the expenses connected with the denomination, in the business circles.

“Many expenses on conducting the denomination fell on the economic subjects. The denomination is the state’s action. So why should the business pay for it? This is wrong,” — says Honourable Chairman of the Business Union of Entrepreneurs and Employers Heorhi Badei.

The business thinks of denomination as not a universal remedy, but as extra organizational expenses, says Chairman of the Belarusian Scientific-Industrial Association Aliaksandr Shvets.

“Each company had to bear financial and labour expenses to prepare for the denomination. Another thing is, the business being pragmatic, everyone will bear the expenses, if the state has taken the decision to conduct the denomination, “ — Aliaksandr Shvets states.

There exists an opinion in the financial circles that the authorities are trying to restore the image of the Belarusian ruble as a steady monetary unit by the denomination and the return of kapeykas into the turnover.

However, there are doubts in the entrepreneurs’ circles that the ruble will be effectively protected from the devaluation processes from now on.

“We cannot say that the business has an urgent necessity to cut down the zeros. Moreover, the business cannot be fully confident that our economy has outlived the emissive injections that lead to inflation,” — Aliaksandr Shvets says.

The level of trust towards the Belarusian ruble will not become any higher as a result of fewer zeros on the bank notes, Heorhi Badei thinks.

“What trust to the national currency can we talk about if we have to withdraw seven zeros for the last 20 years?!” — the Honourable Chairman of the Business Union of Entrepreneurs and Employers asks a rhetoric question.

Remembering the events of the close past, the representatives of the business community note that introduction of kapeykas into the turnover is a premature step.

“They won’t manage to raise the confidence in the national currency due to kapeykas. Kapeykas should be introduced when the country has managed to secure the macro-economic stability during at least three years in a row,” — Aliaksandr Shvets thinks.

Nevertheless, kapeykas will soon appear in the monetary turnover of Belarus, as well as the new bank notes. The state and the business had to pay huge money to conduct the denomination in the country. How reasonable those expenses were?

“We’ll see this in a year,” — Heorhi Badei thinks.

The Belarusian authorities promised to enter the one-digit inflation already by 2017, and in 2020 to reduce it to an unprecedented low level - 5%. If this problem is not resolved, kapeykas in Belarus are unlikely to take root.