Vadzim Iosub: It is quite difficult to talk about devaluation of Belarusan ruble

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And even though such possibility is high, a lot depends on whether Belarusan management will be able to find new loans or refund old debts.

Belarusan ruble is quite stable now. However, before autumn the problem of involving new loans or refunding old debts should be resolved. In 2015 Belarus should pay about $4 billion external debt: up to $2 billion will come to budget from tax on oil; however, at least $2 billion should be refunded.

What stands behind stabilization of Russian ruble? How will it affect Belarusan ruble? How long will the current stability of the Belarusan currency last?

“EuroBelarus” Information Service addressed these questions to Vadzim Iasub, financial analyst of the “Alpari” official partner.

- During the last week Russian economists indicated strengthening of the Russian ruble. What is it caused by?

- Indeed, last week Russian ruble has become stronger. But if we take a longer period, let’s say, last month, the movement of Russian currency is horizontal; dollar exchange rate fluctuates between 59 and 63 Russian rubles per dollar. Within this range fluctuations from one to another level happen.

This is what we should talk about, not strengthening of Russian ruble.

- How stable is this tendency?

- I think that the situation with Russian ruble is mostly affected by two factors: the price on oil and geopolitical tension in the world: events in Ukraine and the resulting regime of sanctions and countersanctions.

Price on oil reached its minimum in the beginning of January 2015 only to increase towards the end of February. Since last week price on oil has decreased again, which has strong pressure on Russian ruble.

After Minsk negotiations on February 12 the acuteness of geopolitical factor has slightly decreased, which plays to the benefit of the Russian ruble.

- The economists talk about unprecedented fall of euro that didn’t happen to the European currency since 2003…

- Objective data proves that now euro costs a little more than a dollar and seven cents – last time European currency decreased to this level 12 years ago, in April 2003.

- How will Belarusan ruble behave in the existing situation? Does stabilization of the Russian ruble mean strengthening of the Belarusan currency?

- Well, it doesn’t. The price of Belarusan ruble is assessed judging by the cost of the currency basket. Since the middle of January the price of consumer basket has been quite stable and is fluctuating in the minimally narrow range, though the price of different currencies is changing differently. Russian ruble rises against Belarusan ruble, dollar is decreasing a little, and euro is decreasing more. Each currency leads its own life.

In the near future the price of consumer basket will remain stable, despite fluctuations of certain currencies to this or that side.

- How long will the current exchange rate of ruble be preserved without inflow of foreign currency?

- This year Belarus has to pay about $4 billion of external debt. Earlier we assumed that it will happen at the expense of taxes on oil that remain in the Belarusan budget from this year on. However, according to the most optimistic prognoses, the inflow of foreign currency from taxes on oil won’t exceed $2 billion. At least $2 billion will have to be refunded before August, when Belarus will have to make one-time repayment of Eurobonds for $1 billion. Anyway, before autumn the acute issue with involvement of new loans or refunding of old debts should be resolved.

- Does it mean that before autumn Belarusan ruble will be having hard times?

- It is quite hard to talk about new devaluation of Belarusan ruble, though such possibility exists. However, as history showed, Belarusan leadership managed to attract additional funding at critical moments.

It is hard to talk about sources: it might be Russian loans and attempts of disposing Eurobonds at world financial markets. I wouldn’t say that before the end of this year devaluation of Belarusan ruble is unavoidable.