Another Small Step Toward a Unified Currency?

Belarus and Russia have taken yet another small step toward deeper integration by signing a memorandum on cooperation in the supervision of financial markets.

The governments and central banks of Belarus and Russia have signed an agreement on cooperation and information exchange in the supervision and/or control of financial markets. This document was developed as part of the implementation of the provisions of the Treaty on the Creation of the Union State.

Officially, the agreement is said to aim at strengthening the reliability and ensuring the stability of financial markets. In essence, however, the document formalizes the methods of information exchange between supervisory authorities (the National Bank of Belarus, the Ministry of Finance of Belarus, and the Central Bank of Russia) within the framework of financial market oversight. The creation of any supranational supervisory body is not envisaged.

The agreement also provides for procedures to conduct joint inspections of financial market participants with cross-border operations and the possibility of establishing joint supervisory boards.

The draft of this agreement was approved on April 22 by Decree No. 172 of Lukashenka. On July 12, Lukashenka also signed a law ratifying an agreement with Russia on mutual recognition of securities prospectuses from companies in both countries. This agreement, which simplifies companies’ access to each other’s financial markets, was signed on December 22 of last year.

Leading Belarusian state media, usually prone to celebratory announcements over any occasion, have commented rather sparsely on the new document. Increased transparency in the financial market is not something the Belarusian side is particularly eager to achieve. It has become evident that Lukashenka is dissatisfied with the level of gratitude from Russia for its support of Moscow’s “Ukrainian military adventure,” particularly regarding energy prices and the level of credit support.

This latest agreement appears to be another incremental move towards closer financial integration, potentially paving the way for further discussions about a unified currency. However, the reluctance to embrace full transparency and the lingering tensions between the two countries suggest that significant obstacles remain before such integration can be realized.