Economist: Be Ready for a New Fall of the Belarusian Ruble

Oil prices can bring a surprise to the Belarusian government once again.

Oil prices which steadily rose over four months after the January minimum began to fluctuate in early July.

On Monday, July 11, oil prices dropped and fell below $46 per barrel. International agencies foresee other period of unpredictable fluctuations in price of "black gold".

Zautra Tvaye Krainy asked financial experts whether the Belarusian economy was ready for it.

Tarasau: A Risk for the Belarusian Economy Exists

According to financial analyst Uladzimir Tarasau, a drop in oil prices is possible; fluctuations are periodically observed in all markets.

- About two weeks ago, a maximum was reached, and in my view, a trend to lower prices has been recently formed, the expert says.

On the other hand, in his view, the decline is unlikely to be as significant as in January, when the "black gold" was traded at $27 per barrel.

- It will affect the Belarusian economy, Uladzimir Tarasau stresses. - The Russian ruble exchange rate will decrease against dollar and euro, it means the decline of the Belarusian ruble as well.

Moreover, it can increase the hole in the Belarusian budget, in case of depreciation of the Russian currency the amount of export earnings will decrease, he believes.

- We should be ready for losses, an interlocutor of Zautra Tvaie Krainy explained.

Iasub: "The Oil Curse" Is Only One Factor

According to senior analyst of Alpari Vadzim Iasub, a serious fall in prices on "black gold" should not be expected.

- Most likely, we are dealing with a slow fall which is associated with processes in the global economy - in particular with consequences caused by Brexit, - the expert believes. - It is still not clear what it results in. There are some forecasts that assume a slowdown in both the UK and Europe, it means a decrease in demand for oil.

It may cause the drop of oil prices, but there will be no collapse.

- $45-50 per barrel looks balanced enough. It is likely possible that oil may cost even more, the expert explains.

Vadzim Iasub notes that the state of the Belarusian economy directly depends on oil prices. First of all, their fluctuations affect the cost of refined products, the basis of the Belarusian exports.

According to the interlocutor of Zautra Tvaye Krainy, even if oil prices do not fall, such a situation cannot be called a minimally comfortable, despite the fact that in the end of last year the state budget was based on the rate of oil prices within 50 dollars per barrel.

- Since that time the number of loss-making enterprises has increased, as well as the number of bad loans which create a burden for state banks, a senior analyst of Alpari explains. - So, even if oil prices equal to 50 dollars or even low, the situation in the economy will be worse than it was expected.

"The oil curse" is still one of the most significant factors, but not the only one, Vadzim Iasub believes.