Updated at 16:23,20-06-2018

Another bluff of Lukashenko


As a result of trading on additional sessions of the Belarusian Currency and Stock Exchange (BCSE) dollar fell from 8600 rubles, paid for it on September 14, to 8030 rubles by the results of trading on September 20.

Many journalists began to talk about some "crash" of the dollar, and Alexander Lukashenko even optimistically said, that "we without someone's help will get out of this situation". To comment on 'behavior' of the U.S. currency and the statements of the President UDF.BY asked the economist Sergei Chaly and the former head of the National Bank Stanislav Bogdankevich.

"Nothing has been stabilized yet"

"Reducing the rate now is a temporary fluctuation. Nothing has been stabilized yet. The rate is anyway disastrous. In fact, what does it mean 8000 - this is 2.7 times more, compared to the first of January. This is a huge depreciation of ruble deposits, inflation at 64%. So, I do not see any special reasons to be glad, that after today's trading the dollar became cheaper. Now there is some 'adaptation' and 'estimation' of various players in the market. The main guarantee of a future stability should be a tight monetary policy, raising the refinancing rate to a level of inflation and budget cuts. Without these no stabilization will happen", said Stanislav Bogdankevich.

"Now, the National Bank doesn't seriously interfere in a process of setting the rate, and allows the market a try to find a balance. Reduction also happened in the 'black' market the week before the first trades in currency and stock market, so everything is logical. At first there was a leaving of sellers, and now we see a mirror image of the situation - 'the leaving of buyers', who don't want to buy the currency, as soon as they expect tomorrow will be cheaper. This causes the drop in rate", Chaly explained the dollar rate decrease.

"The rate will be set in the area of 7 - 7,5 thousand rubles"

"Considering that the rate increase from 6500 to about 9000 was not caused by anything, I'm waiting for stabilization at this level, taking into account an inflation. So, I think, the rate will be set in the area of 7 - 7,5 thousand rubles. After that, it will be logical for the National Bank to gradually start a devaluation. If the tight monetary policy with the limitation of money supply continues, and the National Bank gives the market an opportunity to determine the balanced rate, then below 7500 rubles the rate won't fall", said Chaly.

"Another bluff of Lukashenko"

Commenting on the statements of Lukashenko, that Belarusian economy can cope with the crisis without someone's help, on their own, Stanislav Bogdankevich said, it was "another bluff".

"Our economy is not competitive. We now need investments and technologies which can partly help us to get out of systemic crisis. Lukashenka's statements indicate that the authorities still refuse to recognize the crisis. Let they go to a store or a market, where they immediately see that it really exists. For sure, the authorities have ideological and political will to make the rate more affordable, lower. I think, they would be satisfied with the rate of 6000 rubles per dollar. But the National Bank understands, in order to keep the exchange rate even in the area of 7500 rubles, the substantial foreign exchange earnings are needed, we need credits, foreign loans, sale of state assets. The reserves should be not 4, but at least $10 billion. So, such statements of Lukashenko are another demagoguery and populism", commented on the President's words Stanislav Bogdankevich.

"Not a widespread increase in salaries, but an income redistribution"

Nadezhda Ermakova the head of the National Bank said, when the official rate of Belarusian ruble increases, they will have to increase salaries. According to Bogdankevich, it is more efficient to conduct "not a widespread increase in salaries, but an income redistribution".

"If some officials now are paid more than 4 million, while the average is one and half million, they have to freeze it or even reduce, but not to index. Due to this redistribution you can help the poorest and the most vulnerable people, those about whom allegedly Lukashenko care so much. I am surprised the budget has not been revised yet, including taxation. After all, there is a surplus and we can cut taxes. Simply by raising wages, without recovering the economy, the improvement of leaving standards can't be achieved", said the former head of the National Bank.

"The state is now trying to share with people the inflationary income of the budget, which is nothing else but a perverse form of taxes", said Sergey Chaly.