Expert: Soon we can expect a radical rise in prices for gasoline and medicines
According to the head of the National Bank Nadezhda Ermakova, "today can be considered as historical date ... From October 20 at the Belarusian Currency and Stock Exchange a single trading session started to operate." Most Belarusians, however, will remember October 20 as the date of the second official devaluation in 2011.
National Bank's fx rate on October 21 is Br8680 for 1 dollar, which means a one-time devaluation of Belarusian ruble by 52% from tomorrow, and 188% since the beginning of the year.
UDF.BY asked economist Leonid Zlotnikov and the former head of the National Bank Stanislav Bogdankevich to comment on the results of the first day of a single trading session at the Belarusian Currency and Stock Exchange.
In general, the experts estimate the rate of a single trading session as objective.
"Despite Alexander Lukashenka's statements, that after opening a single session the U.S. currency to be saved from strong Belarusian brother, today the dollar held firm. But seriously, the rate formed at the trades approximately corresponds to the realities of today's economy", Stanislav Bogdankevich commented on the results of tradings.
However, in order to keep the Belarusian ruble exchange rate at the level of today's tradings and especially, at 7-8 thousand rubles, as Nadezhda Ermakova predicted, it is necessary to take several measures:
"Firstly, to call things by their names: to recognize that the country is in crisis, and what happened today is not the single rate introduction but devaluation. Secondly, we need a firm guarantee that lending operations won't grow. Literally, for the third quarter the debt of economy to commercial banks increased by 9 trillion rubles. Money supply will continue to increase, and the "creeping" devaluation will continue too. If these measures are taken, it will be possible to stabilize the rate at 8-9 thousand", said the former head of the National Bank.
Leonid Zlotnikov draws attention to the fact that for long-term stability in the foreign exchange market, the serious fx currency earnings are needed:
"Right now, the ruble exchange rate will be influenced by two factors. First is inflation. If it can not be scotched, then a lot of money are to be spend to keep the ruble rate. The second important factor is the ratio of currency's inflow and outflow. If there is privatization, direct foreign investment, then there is a chance to stabilize the foreign exchange market. But the numbers should be impressive, at around 10 billion dollars of fx currency earnings. Otherwise, it will be difficult", said the economist.
Golden mountains promised by Ermakova from the sale of Beltransgaz are unlikely to become a major factor in resolving the currency issue:
"It was Ermakova's statement, that it will be 2.5 billion earning from the sale of Beltransgaz. This, for sure, can stabilize the situation for several months. But the long-term program is needed, rather than trying to live from loan till the privatization and back", said Leonid Zlotnikov.
Another result of the devaluation will be a sharp rise in prices for some goods and services.
"The main socio-economic consequence will be the rise in cost of services that are based on state regulations. Communal payments, insurance. Soon we can expect a radical rise in prices for gasoline and medicines", said the expert.