Belarus’ foreign exchange reserves fall into financial hole

This has never happened in the history of Belarus: the gold and foreign currency reserves are at a record high. The National Bank now has $9 billion 193.8 million of the reserves in the equivalent. But does it mean that we have become richer?

If neither the country’s income nor people’s salaries have increased, how have the gold and foreign exchange reserves grown? Several factors have contributed to it. The National Bank bought up the currency, which is being actively sold by the population. The cash flow was also provided by petrodollars and the sale of bonds by the Ministry of Finance for foreign currency, as well as the growth of gold prices in the world. This means that amount of gold in the National Bank hasn’t actually increased, but the increase in its value automatically increased the gold and foreign exchange reserves. And the sale of government bonds is not net income, it is a debt.

But the record-breaking large foreign exchange reserves do not mean that the National Bank can rest now on such a safety cushion. The minimum level of international reserves should cover two months of imports, and a good level covers three months. We now have a period of two and a half months of imports: in other words, between a critical level and a good one.

Photo: Toru Hanai / Reuters / Forum

Volha Starastsina


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