Credit rating agency Moody's has warned of an increasing risk that Belarusian banks could default on their obligations and freeze foreign-currency deposits, BelaPAN said.
According to the agency's experts, the country will need from $3 billion to $6 billion in foreign exchange inflows in the second half of this year and the same amount next year to maintain the banking sector's stability and finance its balance of payments deficit.
Moody's estimates that Belarus may obtain the amount through loans from the Eurasian Economic Community's Anti-crisis Fund and the International Monetary Fund (IMF) and through privatization deals. If the country manages to secure the needed level of foreign exchange inflows, the credit ratings of its banks would remain at the current level of B3, while the share of their non-performing loans would increase to 15 percent of the total number of their loans by the end of 2012 and capital adequacy at some banks could fall below the mandatory limit, necessitating additional capital injections of up to $1 billion, the agency predicts.
Under a more pessimistic scenario, Belarus' foreign exchange funding could remain insufficient due to loosened monetary policy, the government's refusal to sell state-owned companies and failure to reach a loan agreement with the IMF. "This could force the authorities to impose a deposit freeze or mandatory local-currency conversion to the banks' foreign-exchange payments," Moody's warns, adding that asset-quality problems would also materialize more rapidly on the banks' balance sheets in 2011, with the level of non-performing loans exceeding 20 percent by the end of 2012. Under the scenario, the risk of default would be materially higher and therefore likely lead to ratings downgrades from B3 to the Caa range, the agency says.
