National Bank: Currency deposit interest will not be paid in Belarus rubels

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Today’s publication in the Council of Ministers’ newspaper shocked and outraged the leadership of the National Bank of Belarus. If it were true, it would mean the total collapse of this country’s financial system.

Wednesday, Respublika newspaper warned the clients that have currency deposits in Belarusian banks that “the time is coming when interest on currency deposits will be paid in Belarus rubels exclusively”. This is allegedly envisaged by the procedure to de-dollarize the national economy launched by the National Bank of Belarus.

The European Radio for Belarus decided to find out how quickly the National Bank would issue a corresponding resolution. But Anatol Drazdou, National Bank’s chief public information officer, appeared to be shocked and outraged with this publication.

“I have not said anything like that to journalists! These are rumors that have nothing to do with the reality. We are not drafting any resolutions in this regard!” he said.

However, he admitted that there is a intention to carry out what he describes as a certain 'de-dollarization' of the national economy.

“This program has not been shaped in a form of a document. But some measures to de-dollarize the country have been taking place. But this means the removal of the dollar from the cash circulation only. By no means, it will affect the deposits of our citizens in banks. No way!”, said Drazdou.

Economist Leanid Zaika who directs the Minsk-based Strategy think tank has explained why just several phrases about the currency deposit interest payments in Belarus rubel caused such a shocked reaction from a representative of the National Bank.

“It could be real, if we faced a complete default and a total collapse of the whole financial system. In that case, “empty” rubels would be printed and paid out instead of the hard currency in a disguise of a new monetary policy. The National Bank cannot do it. Otherwise, we would have to see the leadership of the National Bank off today already. Theoretically, this is a possible scenario. But, from the economic point of view, it would be an indicator that our monetary system is destroyed”, said Leanid Zaika.

The economist supports National Bank’s efforts to reduce the presence of the dollar in the national economy.

“This should be done. The same thing happened in 1994 and allowed to improve the situation with inflation and to stabilize the rubel. The dollar should be withdrawn from domestic payments in shops, fuel stations and restaurants. The national currency should work instead. Alternatively, a multi-currency basket should be introduced to accept the Russian rouble, euro and the dollar. This is another variant of the economic policy, but the Belarusian leadership is not prepared for it”.

Entrepreneurs also support the National Bank. Anatol Shumchanka, the leader of entrepreneurship movement, has been proposing this for a long time.

“We raised this issue with the Ministry of Economy so that the taxes that small- and medium-size businesses pay, be not tied to euro, like it is the case now, but to the Belarus rubel”, said Shumchanka.

But, while the National Bank wishes to remove cash dollars from domestic payments, the measure is not associated with the taxes of entrepreneurs. Anatol Drazdou says it is the Council of Ministers who decides in what currency entrepreneurs should pay their taxes. The government does not wish to lose currency inflows. By the way, the official site of the Council of Ministers has no mention that this issue will be studied by the Cabinet in the near future.