Belarus temporarily tightened the procedure of buying foreign currency for economic entities-residents. According to the National Bank of Belarus, purchase of foreign currency by business entities-residents for payments to non-residents for imports of equipment is only allowed under the foreign trade agreements, not exceeding €50 thousand in the equivalent, up to March 1, 2012.
Tightening procedures of buying foreign currency is provided by the Decree № 240 / 5 of Council of Ministers and National Bank, which was signed on February 25, 2011. According to the document, the import of equipment by foreign trade contract worth over €50 thousand in the equivalent may be exercised only by proceeds in foreign currency and other foreign currencies (deposits in authorized capital, foreign donations, dividends and other income investment, etc.), available to the importer, as well as the foreign currency, received under loan agreements (credit agreements), concluded with non-residents and Belarusian banks for a period over a year.
The National Bank explained that the country’s authorities have made such a move to restrict demand for foreign currency by residents, involved in the implementation of major investment projects. Companies should seriously study the economic feasibility to implement projects and sources of payment (foreign exchange earnings, foreign currency loans of the Belarusian banks or external funding). The National Bank said that small and medium-sized businesses could further purchase imported equipment of €50 thousand in the equivalent due to both the aforementioned sources and the currency, purchased in the domestic foreign exchange market.
National Bank Intends to Encourage Greater Investments’ Efficiency
Apart from limiting demand for foreign currency, National Bank also intends to encourage greater efficiency of investment, for implementation of which special equipment is acquired in terms of both its export orientation and currency recoupment.
The National Bank plans to expand the use of new payment tools for equipment supplies for imports (in the form of deferred payment to the non-resident supplier; provider’s assistance in resident’s obtaining of export credit, etc.).
National Bank also intends to conduct structural reforms. So, it’s planned to establish joint ventures with non-residents, while the latter could make the necessary equipment directly as an investment.
All these measures aim to increase the modernization of the Belarusian economy, explained in the National Bank. In order to execute the tasks, assigned to the Government by the head of state, it is planned to attract foreign sources of the investment projects’ financing (including foreign direct investment), to optimize the entities’ procurement of imported equipment and increase the proportion of currency recouping projects in the totally realized investment projects.