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Stanislau Bahdankevich: "Strengthening" of the Belarusian Ruble Accomplished

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Stanislau Bahdankevich: "Strengthening" of the Belarusian Ruble Accomplished
Stanislau Bahdankevich

The strengthening of the national currency occurred because of decumulation of savings in foreign currency.

The scheduled denomination will promote neither minuses nor pluses to the state; this is the way to cut four additional numbers, eurobelarus.info writes.

Former head of the National Bank Stanislau Bahdankevich believes that Belarusian coins will survive until the next year. The head of the National Bank is ordered to restrain a paper currency issue, otherwise he will be resigned.

However, the situation in the economy is getting worse: the growth of both of inflation and devaluation is expected until the next year. The strengthening of the Belarusian currency occurred because of decumulation of savings in foreign currency. The situation will significantly worsen, if the IMF and the EFSD do not grant new loans.

Stanislau Bahdankevich told journalists about denomination and the situation in the economy.

- It is told that future denomination aims to veil the devaluation. To what extent are these concerns justified?

- I think there is no sense. Prices are specified in two cases: both in old and new calculation. Nothing changes. This is a technical procedure.

There is inflation, so there should be the devaluation which slows down a little. A further devaluation of the national currency in relation to the commodity mass and services continues. However, it has no relation to the denomination.

Anyway, any devaluation causes problems to every inhabitant. What can the ex-head of the National Bank advice to avoid possible challenges?

- Of course, it will cause certain difficulties. We have forgotten how to count pennies. It may cause queues, mistakes, miscalculations on the part of a buyer and a seller, and cheaters. First there is a need to learn how to cut four numbers. Until the end of the year all prices will be doubled and you can compare old and new prices. There is a need to count attentively.

People do not trust the government anymore. But the real problem is the economy: whether it will recover or not, whether the Bank will allow the currency issue or not.

Besides, there is a need to adopt all the equipment to new money. But this is a technical problem.

We faced the inflation before, however, it does not relate to the denomination. It caused with a bad economy, lack of competitiveness, exceeding growth of salary, not labour productivity - core laws of the economy were broken.

- How long can be the existence of Belarusian coins, if the Belarusian economy maintains the status quo?

- I met with the current managing staff of the National Bank. Chairman Kallaur says: Lukashenka has warned him that in case of high inflation caused by benefits in the monetary market, he will make him resign. Kallaur is granted carte blanche to avoid emissions and he will stay until the end. If he does not let the money supply increase when production output falls, then the inflation is acceptable. If it happens then both inflation and devaluation will increase.

- I will ask again: whether coins survive until the next year.

- Yes! I guess Kallaur will take a stand. I do not think that the failure is possible.

Over the past six months people have become poorer, the Belarusian ruble grew strong against dollar. It happened because of some currency savings of people which now are spent to retain the level reached earlier. This is the reason.

But, I guess, this is the end, and the reinforcement of the devaluation is expected in the end of the year. The economy is not recovering, the lack of competitiveness is observed. There are only unwise decisions upon business. The situation is going to be worse in the end of the year.

It will not be true if the credit is granted.

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