There should be fewer U.S. dollars in Belarus: the government and the National Bank approved the plan for the de-dollarization of the domestic economy. That is, they indend to reduce the use of the foreign currency in the calculation and payment of taxes, duties and other payments, as well as a standard unit in the formation of tariffs, rates and prices.
Vadzim Iossub, a senior financial analyst of Alpari company,comments on the new government initiative.
“The trend is good and appropriate. If you visit a European country, there will hardly be an opportunity to pay in dollars. Or you are unlikely to pay in euro in the USA. The authorities are set to create the same situation in Belarus. Firstly, they want all payments to be made in local currency, which has been practically achieved by the moment. Perhaps, someone still pays in foreign currency for expensive purchases, but the times when all goods are sold for dollars in markets have gone. Secondly, another challenge is decouple prices, tariffs, salaries from foreign currency. Thirdly, the share of foreign currency in loans and deposits is to be reduced.
It is possible to ultimately get rid of prices’ and tariffs’ coupling to foreign currency for two years. But the problem is that many Belarusians have foreign-currency deposits – 70% of deposits are in foreign currency.
One should realize that there will be no confiscation of foreign currency or its forced conversion into Belarusian rubles. The case is encouraging people to consider the national currency as a more attractive one. Last year, for example, deposits in Russian and Belarusian rubles were higher-yielding.
The national currency is starting to earn the nation’s trust, but the process is very slow, which is not surprising – for the last 20 years Belarusians have gone experienced the unprecedented inflation and a number of devaluations. To restore confidence, at least a few years of low inflation and stability of the Belarusian ruble are needed.”