If Belarus sticking with current exchange rate, devaluation be inevitable, expert says
In spite the sprightly correlations of the officials even the formal statistics says that the situation at the Belarusian financial market is getting worse.
According to the data of the National bank, in August Belorussian resident enterprises have bought $2.18 billion at domestic market (growth of 28.2% compared to July), and have sold - $2.1 billion (growth of 1%). As a result, the net demand of the resident enterprises for foreign currency in August was $80 million compared with a net offer of $343.2 million, and the July's net offer of $301.3 million. For the first time since November 2011 Belorussian legal persons have become net buyers of currency as of August.
If to consider net sales of foreign currency during last 7 months resident enterprises have been selling $1,5 billion on a net basis, following the results of January-August.
UDF.BY asked economist Leonid Zlotnikov to comment on these figures.
- Since the beginning of the year the inflation has amounted to 15.5 percent. For the first time in this year's August the volume of currency bought by economic entities and Belarus' people exceeded the volume of trade. After the "solvent-diluent" tap had been turned off the foreign trade cash surplus has been reduced. What is happening at the exchange market?
- For the first year half National Bank has bought 2 billion dollars more than it sold, but now this rate is to be equalized. The amount of foreign currency bought is the same as the amount of the sold currency.
Foreign capital outflow has happened. The entities of foreign capital have bought currency for 1.5 billion more than they have sold. And besides it happened during August – September.
I suppose that income from solvents decreased in August-September. The inflow of foreign currency calculated over half-year periods will shrink by 2 billion dollars. With the termination of income stream form solvents the foreign trade balance turned into negative.
- The head of National Bank Nadezhda Ermakova does not exclude "gradual devaluation", meanwhile Aleksandr Lukashenko categorically says: "You must explain people that we are not going to have any devaluation". Whom to trust – to the main banker or to the head of state?
-Neither one nor the other: we should trust the analysis. Maybe Putin will help Lukashenko one more time, as it happened in the end of last year, maybe China will give a few billion loan for unspecific projects. Anything may happen.
That is why the forecast for this issue is only conditional. If Belarus sticks with the current exchange rate, devaluation will be inevitable, half a year earlier or half a year later.
We should look at the whole exchange market, all the sources of inflow and outflow of foreign currency. For example the outflow of currency trade loan by $1 billion has already happened.