Belarusian forex market stabilized, Lukashenko says
MINSK. Oct 16 (Interfax) - Belarusian President Alexander Lukashenko said that the situation on the country's forex market has stabilized, the president's press service reported.
"As far as this is possible, I follow the situation on the currency market. I, of course, am pleased that there has already been a turnaround there after these political bacchanalia and actions of our so-called opposition, which frightened the public through the media and Internet, giving rise to certain devaluationary expectations. It is already possible to say that there has been a turnaround in the situation for a week already, and in the last three days the National Bank bought up foreign currency. This is a good sign for the strengthening of the Belarusian ruble, this needs to be done," Lukashenko said.
He said "entrepreneurs are also beginning to trade essentially at the National Bank exchange rate and even lower."
"Our national currency should not be too firm and strong, so as not to bring down exports, but neither should it be artificially weakened for the benefit of some political elements. Therefore, the National Bank is pursuing an absolutely correct policy," Lukashenko said.
He instructed the government to take steps to strengthen the positive trends on the forex market.
Prime Minister Mikhail Myasnikovich reported to the president that "on the whole the economy is functioning stably." The situation on the forex market has also stabilized, he said.
"Those expectations, when some anticipated the collapse of the Belarusian ruble, have turned out to be baseless. And now the Belarusian ruble is strengthening. The important thing is that retail and corporate deposits in our banking system are growing - the increase in the first nine months amounted to Br31 trillion including foreign currency. This includes Br21 trillion in retail deposits," Myasnikovich said.
A bank analyst confirmed that the situation on the forex market has stabilized somewhat in the past few days. The influx of foreign currency revenues that strengthened the Belarusian ruble somewhat was due to a reduction on the foreign receivables of exporters, he said.
"At the end of September, there was a massive non-return of forex earnings, foreign currency remained in the foreign accounts of Belarusian companies. Under pressure from the government and the National Bank, repatriation of forex earnings increased, which in the last four trading days resulted in small, but nonetheless purchases of forex on the exchange by the National Bank," the analyst said.
Citing National Bank data, he said that in the first 11 trading days of October net purchases of cash foreign currency by private individuals decreased to an average of $9 million per day, while at the end of September daily net demand from private individuals exceeded $10 million.
On one hand, he attributes this to an increase in personal spending since the start of October due to increases in regulated prices for a number of goods, and on the other he noted the continuation of the September trend of accelerated migration of retail ruble deposits into foreign currency deposits. In the first 11 days of October, private individuals reduced deposits in the local currency by Br440 billion, while increasing foreign currency deposits by the equivalent of Br1.5 trillion. In September, Br1.56 trillion left local currency term deposits, while the equivalent of Br4.2 trillion flowed into foreign currency deposits.
"The population is not hiding foreign currency in mattresses. Foreign currency is returning to bank deposits, which on the whole reduces the press on the forex market," he said.
However, the "situation has relatively stabilized for now only at the current stage," he said. "The growing foreign trade deficit is cause for serious concern in terms of providing the financial system with foreign currency resources in the period to the end of the year," he said.
