Devaluation expected after “election”
- 10.09.2012, 10:27
Tension on the country's currency market grows as the “parliamentary election” comes nearer.
Belarusians understand from their bitter experience that the government will lose motivation to keep stability on the currency market after the “election”. People are getting prepared for troubles, profi-forex.by supposes.
There are no data about the volume of foreign cash sales for September, but according to currency exchange offices in Minsk, people actively buy foreign currency. The National Bank chose a bad time – August – to weaken the ruble rate against the dollar (by 1.6), which raised suspicions among people.
The decline in Belarus's forex reserves in August may also have a negative impact on the market.
As the National Bank reported on September 7, Belarus foreign reserves by IMF's standards fell by $89m to $8,158.5 million.
In national terms the forex reserves went down by $103.6 million and reached $8,775.8 million. The National Bank explains this significant decrease with the completion of a swap deal with the People’s Bank of China, under which the National Bank kept Chinese yauns.
According to the National Bank, the level of gold and foreign currency reserves was also influenced by the full settlement of domestic and foreign liabilities of the National Bank and the government in foreign currency.
The National Bank notes the level of the forex reserves has been saved from further decline in August by the growth of prices for precious metals on international markets, but didn't mention foreign cash purchases on the domestic market. It allows to make a conclusion that the demand for foreign currency on the domestic market in August exceeded the supply.
Another fact to prove this assumption is a recent decrease in excess liquidity in the banking system (the money was probably spent on buying foreign currency).
The National Bank held an auction on September 5 to place domestic bonds of issue No. 855. Bonds worth BYR 846.7bn with 19.05% interest rate of were issued for the period of seven days.
Short term domestic bonds worth BYR 1,364.1 billion were issued at the previous auction on August 29 and bonds amounted to BYR 1,778.5 billion were placed on August 22. It means the volume of “excess” rubles in banks decreases.