Pressure on Belarus’ ruble increases amid political crisis – Sberbank
<p> MINSK, Oct 21 - PrimePress. Market actors’ pressure on the exchange rate of the national currency of Belarus has increased in the wake of the political crisis, says the Center for Macroeconomic Research of Russian Sberbank. </p> <p> </p> <p> According to the review, the National Bank of Belarus (NBB) continues to restrain the pressure of market actors on the exchange rate of the national currency, which has sharply increased in the wake of the political crisis. Households bought $622 million on a net basis in August 2020, and only $55 million in September 2020. Companies and banks acted as net sellers of foreign exchange in September. As a result, after the August avalanching decline of the gold and foreign exchange reserves by $1.4 billion to $7.46 billion (16%), the reserves shrank by 1.8% in September to $136 million. </p> <p> </p> <p> On the other hand, the experts say that tight control over the money supply produces negative effects. </p> <p> </p> <p> Given the outflow of deposits and the moratorium on the provision of liquidity by the National Bank, banks have to stop lending to the real sector. Some of them are trying to restart lending programs, but the proposed terms are unlikely to make such products popular, reads the review. For example, some banks offer consumer loans at 32-33% to compare with 14% or below in summer. </p> <p> </p> <p> According to information from open sources, which is hard to verify, in contrast to the private sector, state-owned enterprises receive large-scale support in the form of soft-term financing. Loans are being accommodated against guarantees of the government and local executive committees through state banks, and are used to pay wages and ensure current activities. Perhaps, that is why, despite the economic crisis, real wages continue to grow rapidly (by 7.6% in August), while labor productivity fell by 1.3% in January-August 2020. This poses serious risks associated with these methods of supporting economic activity, Sberbank says. </p> <p> </p> <p> As previously reported, the National Bank of Belarus extended in October the suspension of constantly available operations to support liquidity for 3 months until January 19, 2021, inclusive, to ensure money supply control in the face of increased uncertainty in the financial markets. End </p>
2020-10-22
Primepress
Pressure on Belarus’ ruble increases amid political crisis – Sberbank
MINSK, Oct 21 - PrimePress. Market actors’ pressure on the exchange rate of the national currency of Belarus has increased in the wake of the political crisis, says the Center for Macroeconomic Research of Russian Sberbank.
According to the review, the National Bank of Belarus (NBB) continues to restrain the pressure of market actors on the exchange rate of the national currency, which has sharply increased in the wake of the political crisis. Households bought $622 million on a net basis in August 2020, and only $55 million in September 2020. Companies and banks acted as net sellers of foreign exchange in September. As a result, after the August avalanching decline of the gold and foreign exchange reserves by $1.4 billion to $7.46 billion (16%), the reserves shrank by 1.8% in September to $136 million.
On the other hand, the experts say that tight control over the money supply produces negative effects.
Given the outflow of deposits and the moratorium on the provision of liquidity by the National Bank, banks have to stop lending to the real sector. Some of them are trying to restart lending programs, but the proposed terms are unlikely to make such products popular, reads the review. For example, some banks offer consumer loans at 32-33% to compare with 14% or below in summer.
According to information from open sources, which is hard to verify, in contrast to the private sector, state-owned enterprises receive large-scale support in the form of soft-term financing. Loans are being accommodated against guarantees of the government and local executive committees through state banks, and are used to pay wages and ensure current activities. Perhaps, that is why, despite the economic crisis, real wages continue to grow rapidly (by 7.6% in August), while labor productivity fell by 1.3% in January-August 2020. This poses serious risks associated with these methods of supporting economic activity, Sberbank says.
As previously reported, the National Bank of Belarus extended in October the suspension of constantly available operations to support liquidity for 3 months until January 19, 2021, inclusive, to ensure money supply control in the face of increased uncertainty in the financial markets. End