New blow at Belarusian exports

The Ministry of Economy doesn't rule out the possibility of a decline in exports to Russia.

The reason may be the devaluation of the Russian ruble, Yezhednevnik reports.

If it [the devaluation] continues, the Belarusian government counts on foreign currency arrangements as part of the Common Economic Space while exporting companies are going decrease prices of their goods.

The exchange rate of the Russian ruble is falling in the last few months. It fell 8% from 30 to 32.5 rubles per dollar. Experts are actively discussing the possibility of further devaluation to 35 rubles per dollar by the end of the year.

“Russia signaled it would allow the ruble to weaken to help revive stalling economic growth,” The Wall Street Journal writes.

The Belarusian Ministry of Economy says the Belarusian exports to Russia may decline due to the drop in the Russian ruble exchange rate that will influence the competitive ability of Belarusian goods.

“The Belarusian economic community is keeping a close eye on the situation taking into account an open and export-oriented character of the Belarusian economy,” the country's Ministry of Economy says.

Government experts think that theoretically the ruble slump may lead to the growth of Russian domestic prices on imported Belarusian goods. This, in turn, would decrease the number of consumers and reduce the Belarusian export.

The problem will obviously affect big Belarusian manufacturers that actively export their products to the Russian market. Many of them have already faced problems with export. Companies cannot sell trucks, agricultural vehicles and other equipment. If prices of Russian goods reduce, their Belarusian analogues will lose the competitive advantage in price.

The Minsk Automobile Plant (MAZ) says the current fluctuations of the exchange rate haven't affected the plant yet. If the devaluation happens, the plant is ready to cut prices on its trucks.

“We are watching our competitor's actions,” Illia Subotin, MAZ's deputy commercial director responsible for marketing, says. “If we see that out competitors change their pricing policy, we respond to the conditions on the market and try to make the same steps.”

Official economists don't find the Russian ruble slump critical.

If apprehensions of devaluation come true, the Belarusian authorities count on the mechanisms to support the exports. The Ministry of Economy reminds about the work on the diversification of sales market and agreements on free trade zones with third countries. Belarus relies on stimulating the international leasing and insurance tools.

Belarus hopes for the help of the Common Economic Space to solve problems in the foreign currency market.

Small business of Belarus has no fears of the Russian currency devaluation. According to Siarhei Balykin, the head of the Association of Small and Medium-Sized Businesses, most small businessmen import goods from Russia rather than export. The decrease in prices will work in their interests.

“The situation is not that simple, however,” the expert says. “If sales of Belarusian goods on the Russian market reduce, our people will have less money and hence less opportunities to buy goods and services.”