PROTESTS IN BELARUS MAY BRING THE COUNTRY TO THE BRINK OF DEFAULT

The National Bank of Belarus has published a report on the volume of gold and foreign exchange reserves that the country lost in August. The treasury was emptied by almost 16% - in total, according to the National Bank, no more than $ 7.5 billion remained in it by the beginning of September.

In addition, this year the republic is obliged to pay off its debts amounting to $ 3.6 billion. Experts note that with such a rate of spending of foreign currency, the state's reserves may be devastated as early as in January 2021.

The main item of expenditure of the country's gold and foreign currency reserves was the attempts of the regulator to equalize the exchange rate of the national currency, which began to decline immediately after the presidential elections and protest movements.

The exchange rate of dollar and euro in Belarus increased by almost 9%.The situation got to the point that banks began to refuse to provide the loans for both individuals and legal entities.

The sources note that industrial enterprises, which had to purchase foreign currency to replenish their turnover, found themselves in an extremely difficult situation. Considering that all the foreign money that the business earns now needs to be handed over to the state, and it is difficult to get the money back (the government issues currency exclusively on special requests), the reserves of what is still available in the warehouses may not be enough for a long time.   

The assurances of the Russian president that the country could provide assistance by sending detachments of police from Russia to Belarus caused a negative reaction of the local electorate.

Analysts note that even the restructuring of the Belarus' $ 1 billion debt to Russia is unlikely to save the country from a possible default if the wave of political protests does not stop. In this case, it will be impossible to stop the economic impoverishment, and “help” from Russia has its limits.

Russia, as foreign experts note, is already experiencing serious economic turmoil. Thousands of industrial enterprises have been closed, and the pandemic has led to the appearance of a huge number of unemployed. At the same time, the Government of the Russian Federation plans to spend up to 5 trillion rubles on improving its own economy; it would not be very rational to save the political regime of Lukashenko in such a situation. In addition, the power structures of Belarus, which hold power in the country, may stop obeying if the government is unable to maintain them.