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Purchase Of Foreign Exchange By Non-Residents In Belarus Increased Twelvefold

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Purchase Of Foreign Exchange By Non-Residents In Belarus Increased Twelvefold

The foreign exchange purchase amount by non-residents has reached the annual maximum.

The data of the National Bank on the foreign currency trade performance in domestic market of Belarus in October turned out to be surprisingly alarming, belrynok.by informs.

In October all market players, with the exception of banks, bought more foreign currency than sold. And it means that the relative stability of the exchange rate of the Belarusian ruble in October was secured at the expense of the sale of foreign exchange by banks. But foreign currency resources of the banks are exhaustible, and besides, over time they would try to buy back the currency, which is to put additional pressure on the exchange rate of the Belarusian ruble against the basket of dollars, euros and Russian rubles.

Actions of non-residents cause greatest concerns. In October non-resident entities in Belarus turned from net sellers of currency into net buyers. They have increased the gross purchase amount of currency in the domestic market of Belarus twelvefold as compared to September – up to $120.2 million. It is the maximum for this parameter this year.

Meanwhile, the sales of foreign currency by non-residents remain at almost the same level, and are equal to $33.5 million. As a result, in October the currency purchase amount by non-resident entities in Belarus exceeded the volume of currency purchase by $86.7 million.

The reasons for the growth in foreign exchange demand from non-residents are unknown, but it could not be excluded that it is somehow related to the “elections” and the growth of budget expenditures. The Finance Ministry started to increase its expenses, and probably Belarusian enterprises received ruble resources for payments to non-residents. And they bought foreign currency.

No matter what is the reason for that, the increase in this demand shows changes in the situation at the domestic market of Belarus, and notably for the worse for the Belarusian ruble. It could lead to devaluation of the Belarusian ruble, as there is no influx of currency to the domestic market of the country.

In October resident entities of Belarus increased both volume of sales and purchase of foreign currency in the domestic market, but on net they remained net buyers of currency, like in September and August.

In October sales of foreign currency by resident entities of Belarus increased as compared to September by $65.1 million and reached $1.463 billion. The volume of sales is increasing for the second month in a row.

And the volume of currency purchase by residents in October increased by $30.6 million as compare to September, and amounted to $1.482 million. As a result, in October the demand of residents for currency was higher than supply by $19.1 million. In September this difference was much higher: by $53.6 million. That is, in October the situation improved a little.

Nevertheless, the results of currency trade demonstrate that despite the external trade surplus in Belarus, resident entities of Belarus are selling less foreign exchange at the domestic market then buying. It is not a very good signal for the Belarusian ruble. A possible reason could be the benefits for some enterprises during mandatory sale of currency at the exchange.

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