Updated at 21:04,23-03-2021

Rumours of devaluation dispelled, Belarusian rubel redenomination on the cards

Belsat / BelaPAN

Everything is ready for a currency redenomination in Belarus, but it is necessary to wait until the right time, president Aliaksandr Lukashenka said.

“I have already told you that new banknotes were printed relatively long ago. They are beautiful and look like the euro banknotes,” he added. “We’ll do this when the time comes,” Mr Lukashenka said. The right time is when the national economy gets stable, he explained.

A redenomination is a purely technical affair, Mr Lukashenka noted. “But don't you know our people? They will rush to buy up foreign cash, exchange their money for dollars, euros and so on,” he said. “It is desirable that you should go to stores, not to exchange outlets, and buy what you need.”

There have been two currency redenominations in the history of independent Belarus, in August 1994 and January 2000. It currently takes almost 10,000 Belarusian rubels to buy one US dollar.

At the same time, the National Bank made an attempt to dismiss rumours of sharp currency devaluation after world ice hockey championship.

There is no reason to believe that a sharp devaluation of the Belarusian rubel has been postponed until after the May 9-25 World Ice Hockey Championship, Taras Nadolny, first deputy head of the National Bank of Belarus (NBB), told reporters in Minsk on Wednesday.

According to him, the NBB takes a comprehensive approach to the national currency’s exchange rate, but its policy is transparent. “Any actions in the exchange market may cause an increase in demand for foreign currency,” Mr Nadolny said. Even a gradual decline in the rubel’s rate may trigger a rise in the demand amid high devaluation expectations, he added.

In the first two months of the year, the Belarusian rubel’s exchange rate fell by 2.73 percent against the US dollar and by 2.45 against the euro. If the rate continues to fall at such a pace, the rubel will depreciate by about 15 percent this year.

Belarus has the by far highest domestic currency depreciation rate among the post-Soviet countries since 1991. The Belarusian rubel has depreciated to 99,000,000 per US dollar if the redenominations of 1994 and 2000 are not taken into account.