April 11 – April 17, 2011

Decreasing gold and currency reserves of the country

The situation has not changed
Decreasing gold and currency reserves of the country

Net purchase of foreign currency by the population of Belarus in March amounted to USD 768.1 million. International reserve assets of Belarus calculated according to the IMF standards, as of 1 April 2011 amounted to USD 3761.30 million

they decreased by USD 1269.40 million (25.2%) since the beginning of the year, including by USD 262.30 million (6.5%) in March.


Experts estimated more significant decrease in reserves. The relatively small decrease is a result of a number of administrative restrictions and prohibitions imposed by the National Bank on the foreign exchange market. For instance, foreign currency exchange offices of commercial banks’s ability to sell currency to the population is limited by what was bought from the population. Access to foreign currency at the National Bank rate have “critical” importers only (pharmaceutics and energy resources), up to 10% of their demand is satisfied. Interbank market is largely paralyzed due to the low supply of foreign currency and high exchange rates (transactions are made at the rate 20-50% higher than the official one, which is way beyond the capabilities of many importers in view of the limited purchasing power). At the same time, the possibility of manipulation with the gold reserves levels at the end of the month is not excluded due to swap transactions and foreign borrowing. All these manipulations could be verified later, when quarterly payments balance is published. At this point it is noticeable that in the first quarter of the year the demand of the population for gold has increased by 5 times, the gold component of the National Gold and Currency Reserve has also increased significantly. De facto the National Bank bought almost 2.5 kg of gold in March.

If the situation remains unchanged until the end of the month, freezing of gold reserves at the current level will be achieved at the cost of suspension of significant part of business activity in the country.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.

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