Economist: Even devaluation is not enough to stabilize market
Dzmitry Kruk discourses on the decision about the foreign currency issue the authorities may make one of these days.
PM Mikhail Myasnikovich has promised to make an important decision about the foreign currency issue “after August 20”. It means that it can happen at any moment… Euroradio has interviewed economist Dzmitry Kruk in connection with it.
Euroradio: How real is the decision about another devaluation of the Belarusian rouble?
Kruk: It seems very likely because the gap between the official exchange rate and the “black market” one has become rather huge. The authorities have to react to this situation somehow. Most likely, they will use the scheme they used in May – there will be an official devaluation but to a lesser degree if compared to the market dollar exchange rate.
Euroradio: Will the devaluation help stabilize the market?
Kruk: If the scenario I have just mentioned is used, it will be unlikely. A decision to cancel all the restrictions in the market could help stabilize the market; however, I doubt that the authorities are ready for such a decision at the moment”.
Euroradio: What can the authorities do to fill up the gold and foreign currency reserves now?
Kruk: The most likely alternative is privatization as it is impossible to talk about filling up the reserves with the help of any other instruments in the current state of the economy. Privatization is the only alternative of filling up the gold and foreign currency reserves in the near future. If the authorities count on the fixed exchange rate, they will need huge reserves and privatization will become inevitable.
Photo by — bymedia.net
