EU sanctions may limit Belarus’ ability to attract external financing – Fitch

<p> MINSK, Aug 19 - PrimePress. Potential new sanctions by the European Union (EU) may limit the ability of Belarus to attract external funding, Fitch Ratings says. </p> <p>   </p> <p> “Although we do not expect sanctions similar to those that restrict Russia’s access to external financing, or aimed at key sectors of the economy, the introduction of additional sanctions may limit the possibility of attracting external financing, for example, from international financial organizations, in the near future,” Fitch says in a press release. </p> <p>   </p> <p> The potential sanctions discussed by the Council of Europe can exacerbate economic challenges. Belarus is to repay $1.1 billion in external liabilities in the period from August to December 2020, and about 45% of this amount is debt to the Russian Federation or creditors associated with the Russian government. </p> <p>   </p> <p> The issue of Eurobonds carried out by Belarus in June 2020 in the amount of $1.25 billion and the foreign exchange reserve (Belarus’ gold and foreign exchange reserves amounted to $8.858 billion as of August 1, 2020) smooth out short-term risks associated with financing, and provide the state with certain opportunities to search for additional sources of financing in order to repay $1.9 billion in 2021. </p> <p>   </p> <p> At the extraordinary meeting of the Council of EU Foreign Ministers on August 14, 2020, the ministers discussed additional sanctions against persons responsible for violations committed during and after the election campaign in Belarus. The European Commission was asked to draft sanctions against the Belarusian authorities. European Commissioner Olivér Várhelyi said that the final version of the resolution on the sanctions could be adopted on August 27-28. Also, the European Parliament called on the EU leadership to immediately apply sanctions to punish for violations of human rights in Belarus, as stated by head of the European Parliament David Sassoli. </p> <p>   </p> <p> RAEX-Europe said in July 2020 that the state debt of Belarus consisted mainly of multilateral and bilateral obligations to sovereign and supranational institutions. In 2020, short-term debt obligations were estimated at about 7% of GDP. The agency expected a moderate increase in debt in 2020, taking into account its exposure to foreign exchange risks. The share of foreign exchange liabilities is 98% of the direct government debt. According to the agency’s estimates, under the influence of the depreciation of the Belarusian ruble in 2020, the total public debt can grow to 47% of GDP. Russia and the Eurasian Fund for Stabilization and Development account for more than 60% of Belarus’ external debt, which makes its further refinancing largely dependent on the political relationship between the two countries. </p> <p>   </p> <p> The external public debt of Belarus calculated according to the methodology of the Special Data Dissemination Standard of the International Monetary Fund increased in June 2020 by 6.4% month on month to $19.675 billion as of July 1, 2020. The domestic public debt of Belarus decreased in June 2020 by 0.57% month on month to Br11.93 billion ($4.895 billion) as of July 1, 2020. End </p>

2020-08-20

Primepress