Belarusian MinFin sees no problems with debt servicing
MINSK. May 27 (Interfax) - The Belarusian Finance Ministry does not expect any problems with servicing foreign debt, which has soared 50% in local currency equivalent due to the devaluation.
"There shouldn't be any problems servicing the foreign debt this year, despite the devaluation of the Belarusian ruble," a ministry representative told Interfax.
The budget originally contained significantly more funds that was needed for debt servicing. "We budgeted for 3.46% LIBOR, but the rate is effectively 0.42% now. This will help even out the consequences of the devaluation, and additional budgeted funds will not be needed to service foreign debt this year," the representative said.
In fact the amount required for servicing debt, after liabilities have been adjusted for the actual LIBOR rate, falls to almost $700 million from the budgeted $862 million, he said.
But additional funds will be needed to service domestic debt, as those liabilities depend on the refinancing rate, which has gone up. The additional funding for this is being calculated.
The MinFin is also confident of being able to pay off foreign loans that the government raised and then assigned to companies, for example World Bank loans and discounted Chinese loans, as these do not exceed 7% of overall public debt.
The MinFin said at the start of this year that foreign debt servicing would cost $862 million, including $695 million interest and $167 million principal, assuming that Belarus placed $2 billion in Eurobonds and 15 billion rubles in Russian ruble bonds. The country actually placed $1.8 billion and 7 billion rubles in bonds.
Belarusian public debt was 42.43 trillion Belarusian rubles as of the start of April, up 10.7% from the beginning of 2011. External public debt grew 10.1% to $10.666 billion or 11.8% to 32.48 trillion rubles in local currency equivalent during Q1 2011. The 2011 budget caps the external debt at $13 billion.
The domestic debt grew 7.3% in January-March to 9.95 trillion Belarusian rubles.
Overall foreign debt rose 29.2% in 2010 to $28.512 billion or 52.2% of GDP.
The exchange rate was 4,932 Belarusian rubles/$1 on May 27.