National Bank set to nearly abolish foreign currency use for domestic payments

The National Bank plans to reduce to the greatest extent possible the use of foreign currencies in domestic transactions, Belarus' National Bank Chairman Pavel Kalaur said in an interview with the Respublika newspaper. He noted one of the latest changes - the amendments in the Tax Code have abolished almost completely the possibility of tax payments in a foreign currency. The changes in the Civil Code are also in progress to allow payments in a foreign currency only when the legislation allows it. The list of cases when a foreign currency may be used in domestic payments will be drastically narrowed.

The Finance Ministry will place restrictions on the issue of bonds in foreign currencies at the Belarusian market. The restrictions will apply to all corporate entities, including banks.

Simultaneously, the government will continue to liberalize the legislation on foreign currencies. The mandatory use of passports when purchasing foreign currencies by a physical person was abolished earlier. In the latest move last week, the National Bank abolished the mandatory sale of foreign exchange by economic entities.

The National Bank head says that before payments were tied to US dollars due to the instability of Belarusian ruble and high inflation. However, since the Belarusian currency has stregnthened over the past several years, it makes more sense to carry out domestic payments in the local currency.