Currency Not to Appear in Exchangers after Devaluation, Expert

The head of Ellayns groups company, Vladimir Nesmashni, says that the actual devaluation of the Belarusian ruble of May 11 will not lead to the emergence of currency in exchange offices of the Belarusian banks. "Firstly, banks lacks it (the currency), secondly, people expect for the exchange rate to further rise, at least, Br500 up. Although the revival of the situation with cash is, of course, expected now," said the expert.

According to him, we can expect the following in the short term: the currency rate is likely to emerge within Br4000-4300 per dollar, while the interbank exchange rate will stay at the current levels, but with the expansion of currency sales at the stock exchange under the critical import and repayment of loans its speculative component will decrease.

With regard to the course of the National Bank, Vladimir Nesmashni believes that it is not too profitable to carry out a dramatic course change in the short term, although it has long been economically justified, «but as far as attracting new foreign borrowing, it will increase pressure on the currency market in order to reduce the real exchange rate, which will most likely determine the rate within Be3800-4100.

«It’s difficult to tell anything more precisely as there are a few publicly unvoiced factors, influencing the financial position of the state as a major player on the exchange market, as well as the macroeconomic indicators, indirectly influencing the foreign exchange market,» added the head of Ellayns groups.

Devaluation Caused by Economy Itself not by National Bank, Nesmashni

The expert also says that the devaluation hasn’t been carried out by the National Bank of Belarus. According to him, it’s been caused by objective economic reasons.

«The official devaluation hasn’t been declared, but all have expected it, experts have been predicting and talking, but the National Bank has decided otherwise — and the devaluation has occurred by itself… Despite the general opinion «it’s all for the National Bank» — the bank is not to blame for the devaluation. Devaluation occurred economically but not financially, more accurately speaking — the exchange rate, prevailing in the interbank market and the actual exchange of cash currency, has shown the real situation of the Belarusian ruble on the basis of the status of the Belarusian economy, not foreign reserves,» said Vladimir Nesmashni.

It should be reminded that BNB «specifically said» in its letter of April 24: «Improving the functioning of the internal currency market will continue in the future as a part of economy conditions necessary to maintain the exchange rate of the Belarusian ruble near its equilibrium level.»

«To be honest — I’ve applauded. National Bank has made it clear that it is the financial controller, rather than economic, and no decision of the National Bank may not be the panacea for the country as well as the exchange rate is determined by the economy and the results of its work, rather than currency transactions on the stock exchange,» said the expert.