Experts from the International Monetary Fund has concluded that there is no systemic economic crisis in Belarus, but there are "serious economic problems." This was stated by the head of the IMF mission in Belarus, Chris Jarvis, during the videoconference on April 6. He said the IMF experts were ready to provide assistance to the Belarusian authorities in addressing these issues.
Chris Jarvis says the IMF experts are about to start a postprogram monitoring of the situation in Belarus. He explains that such monitoring is aimed at the countries, received large loans from the IMF.
The Belarusian authorities have taken the proposal to hold postprogram monitoring in a positive way, said Chris Jarvis. This will allow the IMF experts to consult the Belarusian side twice more often than it used to be before — once in six months. Accordingly, the IMF mission will visit Belarus as early as this spring, and the results of the visit will be reported to the Executive Board of Directors of the IMF in summer, BelaPAN.
Chris Jarvis says that Belarus must provide «credible program of economic policy measures» in order to get the IMF financing. Head of the mission also reportes that the authorities have not yet applied to the IMF for new funding, but the fund is ready to give Belarus its recommendations in any event.
IMF Calls Belarus to «Unify» Ruble Rate
The IMF representative has also showed concern over the situation in the Belarusian foreign exchange market, in particular, over the multiplicity of the Belarusian ruble. They call for the official Minsk to «unify the national currency.»
«The causes of current problems in the foreign exchange market in Belarus are in the «soft» economic policies, pursued by the Belarusian authorities over the last year,» said the head of the IMF mission. According to him, the authorities initially built up a high rate of the economy lending in 2010, and then dramatically increased the salaries, resulting in the low competitiveness and high current account deficit. The IMF raises serious concern over the situation with the contributions, in particular, the «flow of ruble deposits in foreign currency.»
The IMF experts recommend the Belarusian authorities to reduce the budgetary costs, increase loan rates and reduce lending of government programs.
National Bank’s Actions Insufficient, IMF
At the same time, the head of the IMF mission praised the decision of the Belarusian National Bank to allow banks to trade foreign currency with entities at a rate, different from the official. According to Chris Jarvis, the policy «provides information» about a fair rate of the Belarusian ruble. However, the IMF considered the corridor of exchange rate fluctuations (10%), set by the National Bank, as inadequate. Such a corridor, according to Chris Jarvis, does not allow free trading in the forex market, so the authorities have been encouraged to «follow exchange rate flexibility.»
Head of the IMF mission has also noted the efforts of the National Bank to preserve foreign exchange reserves. «We can see that they understand the seriousness of the situation and the importance of speedy renewal of the foreign exchange market,» said Chris Jarvis. According to him, the National Bank is quite solvent today, «as it’s managed to prevent a significant reduction in reserves.»