Fitch expects Belarus’ international reserves to reach $7.6bn in 2020, $6.8bn in 2021, $6.2bn in 2022
<p> MINSK, Nov 17 - PrimePress. Fitch international rating agency expects the international reserves of Belarus to reach $7.6 billion by end-2020; to decline to $6.8 billion in 2021 and $6.2 billion in 2022. </p> <p> </p> <p> As previously reported, on November 13, Fitch revised the outlook for the long-term issuer default rating (IDR) of Belarus in foreign exchange from ‘Stable’ to ‘Negative’ and affirmed the IDR at ‘B.’ </p> <p> </p> <p> Belarus’ international reserves will reach $7.6 billion (2.4 months of current external payments; CXP) by end-2020 reflecting external loan disbursements, debt payments and continued deposit outflows. “We forecast reserves to decline to $6.8 billion in 2021 and $6.2 billion in 2022 (1.7 months of CXP), weakening further relative to peers (B median forecast 3.7 months). External liquidity, measured by the ratio of the country's liquid external assets to its short-term external liabilities, is low, Fitch says. </p> <p> </p> <p> Reduced domestic confidence will also maintain pressure on banks' liquidity and asset quality. Foreign currency deposits fell by 7% in August-September with household deposits declining by 15% or $1.1 billion. Over the same period, local currency deposits declined by 6% (including a 5% rebound in September). </p> <p> </p> <p> The structure of outstanding deposits with a high proportion of time deposits limits near-term destabilizing pressures. Belarusian ruble depreciation will also lead to weaker asset quality (50% of loans are in foreign currency) and pressure on capitalization (reported at 16.4%). Fitch considers that asset quality is likely to be considerably weaker than reported (5% non-performing loans) when assessed in terms of IFRS 9 impaired loans. As 60% of the system is state-owned, it represents a contingent liability for the sovereign and could require additional capital injections, reads the statement. End </p>
2020-11-18
Primepress
MINSK, Nov 17 - PrimePress. Fitch international rating agency expects the international reserves of Belarus to reach $7.6 billion by end-2020; to decline to $6.8 billion in 2021 and $6.2 billion in 2022.
As previously reported, on November 13, Fitch revised the outlook for the long-term issuer default rating (IDR) of Belarus in foreign exchange from ‘Stable’ to ‘Negative’ and affirmed the IDR at ‘B.’
Belarus’ international reserves will reach $7.6 billion (2.4 months of current external payments; CXP) by end-2020 reflecting external loan disbursements, debt payments and continued deposit outflows. “We forecast reserves to decline to $6.8 billion in 2021 and $6.2 billion in 2022 (1.7 months of CXP), weakening further relative to peers (B median forecast 3.7 months). External liquidity, measured by the ratio of the country's liquid external assets to its short-term external liabilities, is low, Fitch says.
Reduced domestic confidence will also maintain pressure on banks' liquidity and asset quality. Foreign currency deposits fell by 7% in August-September with household deposits declining by 15% or $1.1 billion. Over the same period, local currency deposits declined by 6% (including a 5% rebound in September).
The structure of outstanding deposits with a high proportion of time deposits limits near-term destabilizing pressures. Belarusian ruble depreciation will also lead to weaker asset quality (50% of loans are in foreign currency) and pressure on capitalization (reported at 16.4%). Fitch considers that asset quality is likely to be considerably weaker than reported (5% non-performing loans) when assessed in terms of IFRS 9 impaired loans. As 60% of the system is state-owned, it represents a contingent liability for the sovereign and could require additional capital injections, reads the statement. End