Belarus on Tuesday effectively allowed a 10% devaluation of its currency on the interbank market, but it was unclear whether the adjustment will be enough to enable authoritarian leader Alexander Lukashenko to shore up the country's finances.
Higher prices for Russian oil imports and a sharp boost in government spending have left Belarus with a large trade deficit and eaten away at its foreign-exchange reserves, which are down 20% since the end of last year.
The National Bank of Belarus said Tuesday that "banks ... are permitted to buy and sell foreign currency at an exchange rate deviating by no more than 10% from the official rate." Previously the regulator had recommended that banks stay within 2% of official rates.
The move will apply only to the interbank market, and not to retail exchanges, a central bank official said.
Belarus devalued its currency by 25% in 2009, fulfilled an International Monetary Fund program and received a $2.5 billion loan from the fund.
The IMF said earlier this month that the country's current account deficit had become "unsustainable" and urged the government to rein in wage increases, credit expansion and external borrowing initiated by Mr. Lukashenko in the run up to his reelection late last year.
Analysts said the move was a "step in the right direction," but questioned whether the devaluation was deep enough to save the country's dwindling foreign reserves.
Belarussian officials had previously said there were no prospects of an official devaluation of its ruble, pinning their hopes instead on a $3 billion loan from Russia and a Moscow-led emergency fund for ex-Soviet states, though analysts have said the cash would only offer temporary relief.
"It's certainly a positive that they've realized their current situation is not sustainable," said Tim Ash, an economist at RBS, adding that it was "difficult to say" whether the 10% would be enough.
Western capitals denounced widespread violations in the presidential vote that brought Mr. Lukashenko another five-year term.
The central bank's official foreign-exchange rates for the ruble on March 30 are 4273.55 against the euro, 3038 against the dollar and 106.93 versus the Russian ruble.
