Belarus to continue servicing foreign debt in national currency - Lukashenko

MINSK. Oct 31 (Interfax) - Belarus will continue to honor its external public debt obligations using the national currency, Belarusian President Alexander Lukashenko said while receiving a report from the country's Prime Minister Roman Golovchenko on Monday.

"My instruction was very clear and it should be fulfilled: we are reliable payers and we are ready to pay our debts, after all, we do not owe that much to the West. However, they have refused to accept currency from Belarus. Well, then we suggested that we pay in Belarusian rubles. They rejected this proposal as well," Lukashenko's press office quoted the president as saying.

"Therefore, my instruction was that debt has to be paid, but we'll credit these payments in Belarusian rubles to separate accounts. If they are ready for us to settle with them, then by all means. If they don't, so be it," he said.

The Belarusian authorities decided at the end of June to pay interest coupon on Eurobonds not in dollars, but in Belarusian rubles, transferring funds to the state-owned Belarusbank, arguing that it was impossible to make payments in foreign currency due to Western sanctions. The Finance Ministry said access to these funds is ensured for Citibank N.A. London Branch, which the Belarusian authorities continue to treat as the paying agent.

Prior to that, the Belarusian authorities decided in March to honor obligations to the World Bank and the EBRD in the national currency. In October, the World Bank recognized its loan portfolio in Belarus as nonperforming.

Following the decision of the Belarusian authorities to pay the coupon on dollar-denominated Eurobonds in Belarusian rubles, the world's leading rating agencies downgraded their ratings assigned to Belarus to default level. The Belarusian Finance Ministry considers the actions of the rating agencies to be acts of provocation, "to simulate default, following the general line of the West."