According to the National Bank, in January 2016, Belarus will require circa USD 1 billion to service her internal and external commitments. The funds are needed to pay off the bonds of previous issues, making payments on Chinese and Russian credit lines, and to redeem the coupon yield on Eurobonds. The National Bank is set to issue bonds with a total worth at least USD 1 billion to be bought by domestic banks and legal entities. In addition, it aims to obtain syndicated loans from foreign banks, most of which will be spent on the National Bank’s bonds. In view of the expected outflow of people’s foreign exchange funds from the banking system, the National Bank will be forced to carry out targeted foreign exchange market interventions with the existing reserves. If the crisis on the foreign exchange market builds up, the National Bank may abandon the deposit market reform, which will lead to an increase in the interest rates on foreign currency deposits for citizens and will stop the currency deposits outflow from banks.
