Belarusbank exempt from compulsory sale of foreign currency

The National Bank granted the Belarusbank a permission not to sell the currency bought at the border crossings to the population, with a view of its subsequent use for social purposes.

The list of such purposes includes: medical treatment, leave due to illness or death of relatives, tuition fees and accommodation fees for students. The Belarusbank has 29 exchange offices at border crossings.

Comment

The decision of the National Bank followed publications in the media about the difficulties the population faced while trying to purchase foreign currency, in particular, by an article published in the Komsomolskaya Pravda, a newspaper with the largest print run, the decision meant to reduce the negative impact of these publications.

It is clear that the decision of the National Bank allows the Belarusbank to achieve easily a positive balance in trade in cash currency with the population. Since the Belarusbank is deciding on the procedures of granting the currency for social purposes, unavoidably it will bureaucratize the issuance of the permission, making the preparation of documents complicated and expensive. In cases of severe illness or a funeral, only very persistent, energetic, and wealthy people will be able to finish all the paperwork before the trip loses its meaning, making it easier to buy the currency at the black market exchange rate.

Therefore the Belarusbank’s release from compulsory sale of currency has the primary purpose of providing support to Belarusbank foreign exchange reserves, or, more likely, to the National Bank, given that in the end of each month, the National Bank borrows from the banks large sums of money for 1 day in order to provide with more favorable reports on gold and currency reserves.