Updated at 19:45,21-02-2018

What coming rate prepares for us?

Klim Haletsky, UDF.BY

Even Alexander Lukashenko can't change economic laws.

Despite the president's statements on 21 September that Nadezhda Ermakova and Mikhail Myasnikovich "have to work in such a way, so that this dollar won't collapse below the established 5000 rubles," the American currency demonstrated a steady growth, rather than a sheer fall.

According to the results of today's trading the dollar costs Br8710, which is by 1100 rubles higher than on 5 October Wednesday.

UDF.BY correspondent asked economists Leonid Zlotnikov, Sergey Chaly and Alexander Chubrik to explain the reasons for such "behavior" of foreign currency.

According to Sergey Chaly, such jumping of the rate at the additional trading session of the BCSE proves that the National Bank doesn't use the administrative source, and this rate can be considered as a market one. However, the main cause of the Belarusian ruble's fall he calls the increase of wage rates and generous promises of the Belarusian authorities:

"As a result of "a handout of prizes" declared by the authorities, a sharp growth of devaluation expectations among a business has occurred. Also it is the statement by Schetkina the Minister of Labour and Social Security, that they plan by year-end to return to the population real incomes which were in 2010. There are also indexations and the increase in wage rates, and the last press conference of Lukashenka".

Leonid Zlotnikov as one of the reasons called limitations of the National Bank to do currency interventions.

"National Bank's possibilities for the interventions are small. The supply for currency at today's trades was very small, but the National Bank was able to sell only 22 million and didn't intervene more. Now it simply has little resources, since there was no replenishment of gold and currency reserves long ago, there is no foreign exchange earnings apart from export", Zlotnikov clarified the situation.

According to Alexander Chubrik, one shouldn't forget about the undermined authority of the National Bank and the government, which over the past six months have done too many groundless statements:

"Firstly, from the beginning of this year, the National Bank and the government have talked a lot about stabilization and exit from the crisis, when it has nothing to do with reality. The degree of confidence to their talks is greatly undermined, so, seeing no specific actions the market tends to highly assess risks. Secondly, the authorities' fx rate and monetary policy is still unpredictable. The National Bank didn't make any clear statements on the plan of its actions, except the possible unification of rates in the near future. Plus the indexation and increase in wage rates".

Economists unwillingly make predictions about what will come next with the long-suffering national currency. According to them, the actions of Belarusian authorities are too unpredictable, while everything now depends on them or almost everything.

"Now everything depends on the authorities. Either they will close down this "shop" of market mechanisms, or they will go in the direction of liberalization. This behavior is difficult to predict. I think the rate will increase at least by virtue of the ruble's inflation. The inflation won't be stopped, because the state does emission and indexes salaries", Leonid Zlotnikov shared his thoughts about the future.

Sergey Chaly also is not sure about the predictive capability of the authorities actions, but he names some steps. Without making them, the ruble's drop won't be stopped:

"Instead of creating the second extra session, the unification under a single market rate and single market rules is needed. When Ermakova told that we would wait another month or two and see where the rate "to calm down", she was wrong. The rate won't calm down. Because the market is quite narrow, each day can be a random excess of demand over supply. There is no stabilization yet, and there is nothing due to which it can be achieved. From the very beginning it was clear that we should not engage in this nonsense, but we should remove all restrictions and let all players at the stock exchange".

At the same time Chaly says, that if the authorities make the liberalization and minimally intervene in fixing the rate, the situation can be stabilized:

"This is not the first sharp increase in rate and every time it encounters the "leaving" of customers, the actual "strike" of importers who understand, that there are budget constraints of households. I think that a sharp rise will be stopped and replaced by a comparable fall. Although, again, this depends entirely on the "adequacy" of the authorities actions".