Belarus Not Taking Proper Steps to Exit Crisis, Kudrin Says

• Bloomberg
• 8.07.2011, 19:50

Belarus isn’t taking “sufficient steps” to exit its financial crisis and needs a “market” exchange rate to lift the economy, Russian Finance Minister Alexei Kudrin said.

“The central bank and in part the government aren’t taking sufficient steps to come out of the crisis,” Kudrin told reporters in London today. Russia “can’t always be paying for the sins of the government” of Belarus.

Belarus has been importing “substantially more” than exporting, which led to a current account gap of 16 percent of gross domestic product, according to Kudrin. The government used outside loans including from the International Monetary Fund to mask this imbalance instead of gradually devaluing the national currency over the past three years to correct it, he said.

“Negative trends” in all segments of the domestic foreign-currency market are easing after the Belarusian ruble was devalued in May, the Minsk-based central bank said in a statement on its website today.

The Russia-led Eurasian Economic Community sent $800 million to Belarus on June 21 and may grant $2.2 billion more over the next three years. Belarus’ international gold and foreign currency reserves surged by $588 million in June to $4.15 billion after receiving a bailout loan, the central bank said in a statement on July 7.

“Help will only be granted after Belarus itself will begin to take measures to stabilize its own economy,” Kudrin said, referring to aid from Russia and the IMF.