German Gref: Belarusian government cannot avoid devaluation

• 18.04.2011, 10:20

The Belarusian government will not be able to avoid a devaluation of the national currency amid the increasing foreign trade deficit and falling gold and currency reserves.

The statement was made by German Gref, the Chairman of Board of Russian Sberbank, owning one of the largest Belarusian banks, BPS-Bank, Interfax-Zapad news agency reports.

“The government won’t be able to avoid a devaluation of the currency, though this will be very good for the economy,” Bloomberg cites Gref.

As already reported, Alyaksandr Lukashenka said on Saturday that the situation on the country’s currency market would be settled within some days. “We will level the situation today or tomorrow. Don’t offend at me. We will cope. The worst have already happened,” Lukashenka told journalists.

Answering a question when currency exchange rates will be brought into balance. Lukashenka noted, “The rate is a matter of several days, maybe, a week. These processes are already fading. The situation on the currency market is not so catastrophic as before.”

Due to a 25% decline in foreign reserves in the first quarter of 2011, the National Bank of Belarus preserves moratorium on exchange market interventions, which has led to a sharp deficit of foreign currency in all segments of the inner currency market. In this situation, the shadow market of noncash foreign currency is forming, where the current exchange rate is already 50 percent more that an official one. The Belarusian ruble is falling rapidly on the shadow market: at the beginning of last week, it exceeded the official rate 30%.

Meanwhile, the ruble rate devaluation has almost reached the bound of the set corridor, not more than 8% against the currency basket (which consists of the US dollar, euro and Russian ruble). As of April 18, the Belarusian ruble fell against the currency basket 7.57%.