Belarusian ruble reinforced due to net supply of foreign exchange – EDB analysis

<p> MINSK, Oct 11 - PrimePress. Net supply of foreign currency (i.e. FX sales to banks exceed FX purchases) has been supporting the exchange rate of the Belarusian ruble (Br). This is stated in a weekly review of economic news shared by the Eurasian Development Bank (EDB). The review was published on October 11. </p> <p>   </p> <p> “September’s net supply of foreign currency on the domestic market was formed at the expense of transactions by households, which sold a little over $180 million on a net basis during the month. In recent months the EDB has observed both an increase in seasonally adjusted supply of foreign currency and a decline in demand from households. This could be due to slower growth in household incomes and higher interest rates on Br-denominated deposits. A possible increase in money transfers from migrant workers cannot be ruled out either, as Russian and global economies are recovering. The net supply of foreign currency supports the exchange rate of the Belarusian ruble,” reads the review. </p> <p>   </p> <p> EDB experts note that Belarus’ international reserves amounted to $8.46 billion as of 1 October 2021 after a decrease by $36.8 million in September, "due to the repayment of foreign currency liabilities of the government - about $240 million.” </p> <p>   </p> <p> In its previous release posted in Sep 2021, the EDB baseline scenario forecasted a moderate weakening of the Belarusian ruble against the dollar as a result of the impact of sanctions, devaluation expectations and high inflation in Belarus. Average exchange rate of Belarusian ruble against dollar was projected at about Br2.55/$1 in 2021 and Br2.67/$1 in 2022. </p> <p>   </p> <p> EDB experts recalled that the reinforcement of the Belarusian ruble strengthening (by 3.1% against the FX basket during the period from 1 January to 15 September 2021) contributed to a net supply of foreign currency in the domestic market: the rise in exports by enterprises, and the population - due to slowing income growth and limited opportunities for foreign tourism. Under such conditions, the volume of foreign currency purchases by the National Bank of Belarus in July - August 2021 exceeded $600 million. </p> <p>   </p> <p> According to the National Bank, in January-September 2021, foreign currency purchases by residents totalled $19.208 billion, FX sales - $19.766 billion, the balance in favour of banks amounted to $558 million. In January-September 2021, non-residents bought $315.1 million worth of foreign currency and sold $718.9 million. The balance in banks’ favour amounted to $403.8m. End </p>

2021-10-12

Primepress