The U.S. dollar rate is slowly but surely declining against the Belarusian ruble, inflation for the first ten days of January is 0.5% - a figure that fits well within the government forecast on inflation in 2012.
Stabilization in the economy has happened, despite the high-powered work of domestic printing press: the ruble supply increased by 13.2% in December. One gets the impression that Belarusian authorities have managed to outwit the laws of economics. Is it true?
Economist Leonid Zolotnikov in an interview to UDF.BY tried to explain why one should not make far-reaching conclusions from short-term economic indicators.
Firstly, according to the expert, the December emission couldn't make itself felt in such a short period of time:
"All processes have some lags. If to increase the money supply today, then prices will increase tomorrow. It will happen in a few months".
Secondly, the National Bank have certain resources and tools allowing to carry out emissions and at the same time to contain inflation.
"Money supply can be sterilized. For example, if the dollar fell in value, then the population got more money (because the authorities printed some extra) and they can buy more dollars. The National Bank have resource for this, in the form of $4 billion of additional reserves. It could afford this game: to increase the money supply and at the same time to contain inflation. There are many tools and possibilities. But these "games" will continue as long as the National Bank has foreign currency".
Zolotnikov predicts, it will be possible to contain devaluation and inflation processes till late spring, early summer, and then they have to seek sources of funding "Belarusian economic miracle":
"Everything is fine, as long as there is borrowed money, which can be consumed. It's bad, when nobody gives some more. This is the economic model we have had in recent years. Due to inflation and devaluation, the state is skimming "fat" from the business, plus the 4 billion we've got in the end of the year - these are resources that can be spent on increasing incomes and controlling inflation. But this will end in another deterioration by the end of spring, as it is nowhere to take more money, besides, they have to give the debts back".