Moody’s rating agency informed that Belarus will need 3 to 6 billion dollars to stabilize the banking system and to solve current economic system by mid-2011. Otherwise Belarus will go bankrupt.
According to Moody’s the necessary means can be obtained from foreign credits, for example from anti-crisis Eurasian Economic Community fund or the International Monetary Fund. Belarus can also continue with privatization and freeing the ruble rate.
However, even if the proposed solution will be introduced, experts predict that rating of Belarusian banks will remain on B3 level, assigned in July.
According to Moody’s, in such case the bad bonds will amount to 15% by the end of 2012. In 2010 – it was only 3%. Banks equity capital will decrease to 4% on average – way below the required level of 8%. At the end of 2012 the government will be forced to inject a billion dollars into a banking system from the state budget.
According to experts, if the government does not introduce reforms, the rating will go down from B3 to CAA, contributing to insolvency. The experts blame the current economic problems on inaccurate monetary policy, lack of privatization and unfulfilling agreement with IMF. Moody’s is particularly concerned with decrease of currency reserves in Belarusian banks.
If the situation does not change, experts expect bad bonds to amount to 20% in 2012, which will force the Belarusian authorities to drastically reduce currency deposits or force citizens to exchange them for rubles.