Moody’s: Belarusian economy faces significant macroeconomic risks

On June 20, 2013 Moody’s Investors Service affirmed the deposits ratings of five Belarusian banks: Belarusbank, Minsk Transit Bank, BPS-Sberbank, Belinvestbank, and Belagroprombank. These banks’ long-term deposit ratings carry a negative outlook.

This affirmation of Belarusian banks’ deposit ratings follows Moody’s affirmation of the B3 local-currency government bond rating of Belarus as well as the B3 foreign-currency bond ceiling and the Caa1 foreign-currency bank deposit ceiling on 14 June 2013.

The deposit rating affirmations, with negative outlooks, reflect Moody’s view that the current ratings sufficiently capture the Belarusian banks’ high vulnerability to the elevated risks associated with their exposure to government debt and the national economy. In Moody’s opinion, the Belarusian economy faces significant macroeconomic risks that could constrain economic growth and destabilise government finances, with adverse consequences for banks’ credit profiles.

Moody’s expects that the banks’ asset quality will deteriorate given (1) weaker exports and domestic economic activity, which will negatively affect borrowers’ credit standing; and (2) lower subsidies to borrowers from the government, especially if economic imbalances grow and external financing conditions tighten.

The full list of the affected ratings is provided in the press release.

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