Leu Marholin: The government doesn’t want to strengthen the Belarusan ruble against the Russian

Any stabilization of Belarusan ruble against Russian ruble decreases the opportunity to buy goods produced in Belarus, and, accordingly, decreases export and increases stocks in warehouses.

The only way to avoid such scenario is to preserve the parity, assumes economist Leu Marholin.

On June 8 Belarusan ruble continued to fall against the currency basket by 0.48% considerably falling against the dollar. Dollar rose by 96 rubles – up to 15 414 rubles; euro fell by 57 rubles – to 17 237 rubles, whereas the rate of Russian ruble increased by 276,21 rubles.

Since early June Belarusan ruble is swiftly falling. What is it caused with and what can it lead to? Leu Marholin in the interview with the “EuroBelarus” Information Service analyzes the situation.

- Falling of Belarusan ruble rate against dollar has been happening for three weeks now, and experts forecast that it will continue. What can such weakening of Belarusan ruble be explained with?

- I think that the main reason is falling of Russian ruble that we are closely tied to. In comparison to the previous year, Belarusan authorities don’t want to strengthen the stance of Belarusan ruble against the Russian currency. The printing press doesn’t seem to work; enterprises don’t get lax credits; however, non-payments of salaries over the last month increased by half. That is why I believe that falling of Belarusan ruble is related to the events in Russia.

And the situation in Russia is caused by an objective reason – nobody is going to lift sanctions; it turned out that the price on oil is fluctuating within $50. That is why Russian ruble that we are tied to is falling.

- Thus, while Russian ruble is falling it will be dragging Belarusan currency with it, won’t it?

- If the scales of Russian ruble’s collapse will reach last year’s indicator – by 80 rubles, Belarusan authorities won’t automatically follow the Russian ruble rate but adjust it within 10-15%. All the more that Belarusan ruble hasn’t yet outreached the boundaries that were set in the beginning of 2015. Obviously, the National Bank also finds these fluctuations allowable.

- Why do the Belarusan government and the National Bank synchronize the rate of Belarusan ruble with the Russian?

- In order to keep the remains of the Russian market. Any strengthening of Belarusan ruble against Russian reduces the paying capacity of Russians, and, accordingly, reduces export and increases stocks in warehouses. The only possibility to avoid it is to preserve the existing parity. It is somewhat lower now: if you remember there were times when one Russian ruble cost 30 Belarusan ones. Now it is less, but it still gives some opportunities for export.

- Experts forecast further falling of Belarusan ruble rate. Accordingly, within the next few days the National Bank will have to decide whether to support Belarusan ruble or to let it go into free fall, by this taking the risk of causing panic at the currency market. Will such necessity appear?

- If the fall continues, we will have to choose: whether to keep to the market rate till the end or to support the national currency. The National Bank stated that it won’t be supporting Belarusan ruble but will only smooth some peak fluctuations. And then we will see how words correspond to actions.

- Are there any limits to which Belarusan ruble can fall?

- I think there are no limits. On the one hand, Russian factor is pressing, on the other – I don’t think that the authorities will resist the fall of the Belarusan economy and won’t include printing press. So I think that the fall will continue.

18-20 thousand rubles for $1 is a quite real Belarusan ruble rate towards the end of this year.