Belarus, Russian currency to be affected in the same way?
The European Radio for Belarus talks to economists to find out how a possible depreciation of the Russian rouble will affect our country. Dmitry Butrin, the head of economic policy department at the Kommersant Publishing House, remains calm. In his view, a technical devaluation is currently taking place in Russia. It is not painful for households and enterprises.
He said: "A technical devaluation has happened to the rouble. In other words, it has weakened by one percent. We don't take it seriously. But it is worth noting that the Central Bank said in a statement that it would not maintain the rouble at the same level in the long-term perspective. This means that with the current oil prices, the rouble will continue to fall during the next several months and, possibly, within the range of 5 percent against the current exchange rate. Neither the population nor enterprises are threatened in a huge scale as they are talking about it".
Economist Siarhei Chaly from Belarus says that Rusia considered a possibility of abrupt devaluation but eventually decided that no radical measure were timely yet:
Chaly: "I have a feeling that permanent delay of Medvedev's address reflected the struggle of people who were saying that a sharp devaluation had to be carried out. Moreover, there were possibilities and the Central Bank seemed to be taking steps in order to carry out an abrupt er, and they thought that radical changes were not needed. While they were postponing, there was an illusion that the situation at the world markets became quiet. A decision about a gradual devaluation has most likely already taken".
Theoretically, when ab abrupt devaluation is carried out, enterprises can be threaten with bancruptcy. During a gradual devaluation, the currency weakens unsignificantly, but the gold and currency fund is expended. According to Siarhei Chaly, even devaluation expectations put pressure on the foreign currency market.
Chaly: Economists do not have a consensus about how devaluation should be carried out in the right way: gradually or abruptly. For example, the pace and the duration of devaluation can be declared preliminary. These devaluation expectations will additionally create pressure on the national currency.
Minsk is now mostly interested in how the devaluation of the Russian rouble will influence on the situation in Belarus. According to Natallia Sukharava, a professor from the Belarusian State University of Economics, the Belarusian rubel will be affected in the same way as the Russian rouble.
She said: "I think that devaluation is inevitable. The devaluation in Russia means that the same will be happing here as well. Our economies are bound, and Belarus has an open economy. Our exports are falling".
Economist Siarhei Chaly also noted that the devaluation of the Russian rouble will "eat" a huge piece of the gold and currency reserve of Belarus.
Chaly: "Our president said that almost a half of the country's gold and currency reserve was in the Russian rouble. I doubt it geatly that it is true. I think that his statement was something like an indulgence that the president wrote for himself. In case something happens in Russia, he can say that blame should be put on Russia".
However, according to the economist, devaluation is politically impossible in Belarus, because all the achievements of the government will be destroyed.
Chaly: "Since 1995, the reputation of the president has been based on the economic achievements. In 1995, he announced that our economy was stabilized and the stable rate of the US dollar was proof to that. When this factor is eliminated now, it will be a serious political and ideological blow".
If the devaluation happens, the middle class who has just emerged in the country, will have lost the most.
He said: "A technical devaluation has happened to the rouble. In other words, it has weakened by one percent. We don't take it seriously. But it is worth noting that the Central Bank said in a statement that it would not maintain the rouble at the same level in the long-term perspective. This means that with the current oil prices, the rouble will continue to fall during the next several months and, possibly, within the range of 5 percent against the current exchange rate. Neither the population nor enterprises are threatened in a huge scale as they are talking about it".
Economist Siarhei Chaly from Belarus says that Rusia considered a possibility of abrupt devaluation but eventually decided that no radical measure were timely yet:
Chaly: "I have a feeling that permanent delay of Medvedev's address reflected the struggle of people who were saying that a sharp devaluation had to be carried out. Moreover, there were possibilities and the Central Bank seemed to be taking steps in order to carry out an abrupt er, and they thought that radical changes were not needed. While they were postponing, there was an illusion that the situation at the world markets became quiet. A decision about a gradual devaluation has most likely already taken".
Theoretically, when ab abrupt devaluation is carried out, enterprises can be threaten with bancruptcy. During a gradual devaluation, the currency weakens unsignificantly, but the gold and currency fund is expended. According to Siarhei Chaly, even devaluation expectations put pressure on the foreign currency market.
Chaly: Economists do not have a consensus about how devaluation should be carried out in the right way: gradually or abruptly. For example, the pace and the duration of devaluation can be declared preliminary. These devaluation expectations will additionally create pressure on the national currency.
Minsk is now mostly interested in how the devaluation of the Russian rouble will influence on the situation in Belarus. According to Natallia Sukharava, a professor from the Belarusian State University of Economics, the Belarusian rubel will be affected in the same way as the Russian rouble.
She said: "I think that devaluation is inevitable. The devaluation in Russia means that the same will be happing here as well. Our economies are bound, and Belarus has an open economy. Our exports are falling".
Economist Siarhei Chaly also noted that the devaluation of the Russian rouble will "eat" a huge piece of the gold and currency reserve of Belarus.
Chaly: "Our president said that almost a half of the country's gold and currency reserve was in the Russian rouble. I doubt it geatly that it is true. I think that his statement was something like an indulgence that the president wrote for himself. In case something happens in Russia, he can say that blame should be put on Russia".
However, according to the economist, devaluation is politically impossible in Belarus, because all the achievements of the government will be destroyed.
Chaly: "Since 1995, the reputation of the president has been based on the economic achievements. In 1995, he announced that our economy was stabilized and the stable rate of the US dollar was proof to that. When this factor is eliminated now, it will be a serious political and ideological blow".
If the devaluation happens, the middle class who has just emerged in the country, will have lost the most.
