Belarus risks devaluation due to IMF forecast of dwindling gold reserves by year-end

According to the IMF forecast, Belarus’ international reserve assets may drop to USD 2.5 billion or 0.8 months worth of imports by late 2015. It is noteworthy that devaluation in 2009 and 2011 occurred when the level of gold reserves fell below one-month worth of imports. In order to prevent devaluation the government may undertake the following measures: carry out wage freeze policy in order to preserve net sales of foreign currency on the domestic foreign exchange market; step-up its talks with international creditors in order to place new bond issues on international markets; maintain high interest rates (6%) on foreign currency deposits in Belarusian banks for the population; increase pressure on importers in order to curtail imports; and adjust government programmes so that to reduce imports of equipment and raw materials in 2015.