Belarus borrows from Russia to pay back Russian loans


The Belarusian authorities have asked Russia for another loan ($700 mln) to refinance its external national debt.

As of May 1, Belarus’s external debt nearly reached $14 billion, while nternal debt is BYN 9.9 bn. This year, Minsk will have to pay $1 bn; in January 2018, $ 800 mln are to be given back for eurobonds. Such data is provided by the Belarusian Ministry of Finance.

Belarus may soon receive $600 mln, the fourth and fifth tranche of the loan provided by the Eurasian Fund of Stabilization and Development (EFSD), an entity working under the Eurasian Economic Union, i.e. ie de facto Russia. But Belarus doneeds even more money.

A new loan approval by Russia depends on mutual political relations, Vadzim Iossub, an analyst of Alpari company, believes. For example, the EFSD wants Belarus to reform of the state economic sector, but the country is reluctant, he says.

Will Russia help again?

It is Russia and the EFSD that are Belarus’ main money lenders, not China, the EBRD or the IMF, former head of the National Bank Stanislau Bahdankevich says.

In the period from July 31 to the end of the year, Belarus’s foreign debt grew to $ 13.1 bn – by half a billion dollars. For the first four months of 2017, the debt increased another $ 300 bn and totaled $ 13.9 bn.

Belarus is able to pay off quarter of debt

Vadzim Iossub recalls that the amount of debt is not directly relevant the economic situation in the country. Great Britain’s or Japan’s debts are heavier than Belarus’, but wages are also much higher there. In his opinion, it is of utmost importance Belarus maintain its own debt singlehandedly.

“Belarus is able to pay back only a quarter of its debt. In years ahead, the lack of refinancing may lead to full depletion of foreign exchange reserves and, as a result, a complete loss of value by the national currency, as well as declining living standards of our people,” stresses the expert.

belsat.eu

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