Belarus heads for default

Ukrainian and Russian experts predict the collapse of Belarus's economy.

The interest rates in interbank ruble credits have been continuing to grow rapidly since July 12.

According to the data of the National Bank on July 24, the average rate in one-day credits in the national currency for residents reached 65% and the volume of trade was Br224 billion. To compare: the average rate was 50.5% and the trade volume was 224 billion rubles on July 22; the average rate was 46.4% and 41.9% and the volume of trade was 287.5 billion and 601.5 billion rubles on July 19 and July 18 respectively.

Ukrainian economist Pavel Iliashenko said to Kyiv-based radio Golos Stolitsy that the increase in interest rates up to 60% meant the collapse of the banking system.

“If we look at the reasons of the situation, we see the fourth deposit crisis for the last five years. People are actively withdrawing money from banks. As a result, banks suffer from lack of money, and the growing interest rates provoke problems in the interbank market,” Pavel Iliashenko said.

Doctor of Economics Elena Veduta from Russia agrees with this opinion, Regnum news agency writes. She said commenting on the current state of the Belarusian economy and the latest data from the National Statistics Committee that the situation in Belarus would continue to deteriorate.

“The global crisis affects the weakest countries. The situation in Belarus will continue to deteriorate,” the economist thinks.

Speaking about further developments, she noted that Belarus would face a default sooner or later. “I can predict a default in our country and a default in Belarus. It will continue until we learn how to manage the economy to achieve sustainable development. We continue to have defaults as long as the government, the State Duma and the Belarusian parliament go on adopting unrelated laws chaotically. This is a natural process,” Elena Veduta said.