Belarusian bonds to downgrade

On February 23rd, Moody’s placed Belarus’ B3 government bond rating for review. The key drivers for the downgrade listed as: increased strain on Belarus’s external payments position amid shrinking foreign exchange reserves and economic slowdown amid recession in Russia. Belarusian bonds will continue depreciating on the international markets, and the cost of borrowing for the Belarusian banks from their foreign counterparts will rise. As a result, currency deposit interest rates will slightly increase and the Belarusian authorities will step up their efforts in attracting resources from international financial institutions (World Bank, EBRD and others). Belarus might receive some financial aid after the meeting of Russian and Belarusian president in early March 2015.