Not without a selfish motive, the population helped the National Bank to keep the reserves at USD 8 billion

On March 1^st, the National Bank reported that Belarus’ gold reserves were USD 8 011.8 million.

National reserves at USD 8 billion is the key goal for the National Bank. International trade is not the main source of keeping up the state reserves, and the new loans’ tranches are not expected before May 2013. Net foreign currency sales by population should not be regarded as a constant factor, they only explain the people’s desire to make quick profits from national currency deposits, bearing in mind stronger BYR.

In 2013 the National Bank has to meet three key parameters. Firstly, the national reserves’ level, calculated by IMF standards, secondly, the discount rate and, thirdly, the increase in banks’ claims to the economy. Of these three parameters, the key one is the national reserves – which by January 1^st, 2014 should increase by USD 0.3-0.7 billion relative to January 1^st, 2013 standard.

Since May 2012 the National Bank managed to maintain the state reserves’ level at USD 8 billion.

International trade balance in January 2013 was minus USD 150.3 million. Considering international trade in services in January, the trade balance in goods and services would be positive, but USD 340 million in export duties for oil products produced from Russian oil, which were listed in the Russian budget, should be taken into account. Relatively favourable foreign currency market situation in February 2013 should not be misleading. Payments on the export-import operations are not synchronized in time with the goods’ supply. Reduced rates on the interbank market will increase investment imports, affecting the goods’ imports volumes. USD 440 million from the EurAsEC Anti-Crisis Fund can only be expected after the Board’s decision, which is scheduled for April-May 2013. Belarus cannot count on international trade as a source for gold reserves.

In February 2013 Belarus’ population became net foreign currency supplier for the first time since May 2012. National currency deposits offer interest rates 40% pa and higher, coupled with relative stability in the currency market, this has naturally resulted the population’s reduced demand for foreign currency. Numerous national holidays and consequential growth of consumer spending was an additional factor to be taken into account. However, the National Bank’s desire to lower interest rates on business loans can make a difference, and people might again become net currency buyers.

The population has helped to keep the gold reserves in February by reducing its demand for foreign currency, but this is only a short-term impact factor because of the government’s intention to reduce national currency deposits’ interest rates. As interest rates reduce, the population’s demand for foreign currency will increase and foreign currency deposits will regain popularity.