Syarhei Chaly: Currency policy – going back to late 90s
The famous economist comments of the Belarusian state leader’s initiatives.
Euroradio: Lukashenka is going to set the national currency exchange rate free in mid September. The state leader claimed it at the meeting dedicated to issues of the social and economic development of Belarus on August 30. The market exchange rate of the Belarusian rouble will be defined at an additional session on the stock exchange in the middle of September. It turns out that some people will have to use the additional session with the market exchange rate and others will be allowed to use the main session with the exchange rate established by the National Bank. Is it true?
Chaly: It is déjà vu of the 90s when there was a single session where “elite” buyers could access foreign currency at an exchange rate that differed from the market rate a lot and there was an additional session for all the rest.
Euroradio: Why wouldn’t the National Bank cancel the obligation to sell 30% of foreign currency receipts?
Chaly: It could have sense if we fully switched to the market exchange rate, cancelled all the restrictions and if all participants of the foreign currency market were given access to a single session. The National Bank would have to announce the exchange rate defined by the supply and demand to be the official market exchange rate. However, this is not happening and if you do not keep the obligation to sell foreign currency, nobody would do it with this exchange rate.
Euroradio: Some restrictions are getting cancelled and new ones are appearing. Lukashenka has claimed that foreign currency will be sold only if you show your passport... Can you comment on it?
Chaly: It is a very peculiar thing. Our authorities resemble a patient – doctors told him to take medicines because the situation was very serious. The patient refused. The situation aggravated. The doctors told him that an operation was required. And the patient said: “Oh well, I have decided to take some pills”. The decisions are tardy and they will not help. The situation will improve but this is a great system problem. The recognition of multiple exchange rates de facto will reduce the possibility of getting a credit from the IMF.
