Where did $590 million disappear from gold and foreign currency reserves?

According to the National Bank, the gold and foreign currency reserves of the country have decreased by $600 million for June.

The National Bank has a little more than $2.5 billion in the reserves. Head of the information department of the National Bank Anatoly Drazdou explains this by reduce in Belarusian goods exports, Euroradio reports.

“Taking into account reducing of export by almost 50 per cent over six months, it becomes clear why exports proceeds have declined in the country,” Anatoly Drazdou says. “Besides, individuals demonstrate periodic roaring demand for foreign currency and enterprises buy foreign currency at foreign exchange and at over-the-counter markets. We produce goods from raw materials or imported component parts – so, we need foreign currency. The situation at the foreign currency market is clear. I see nothing strange here. There are seasonal payments, state-owned enterprises that have to pay among other thing for energy.”

Independent economist Syarhei Chaly, the volume of the gold and foreign currency reserves reduced due to costs of supporting the national currency rate against the dollar rather than due to decrease in the national exports.

“The money was spent mainly to support the national currency,” the expert states. “To reduce the difference between demand and supply of the currency at foreign exchange trade. The comparison shows that it is almost the difference between the demand for and purchase of foreign currency.”

His colleague Syarhei Zhbanau shares this opinion.

“A rather stable rate of the ruble fluctuates around the sliding average rate,” Syarhei Zhbanau says. “If you hold the rate or try to show its stability, you have to perform interventions and enterprises buy foreign currency for their needs.”

What to the Belarusian exports, Syarhei Chaly thinks it affects the reserves reducing, but payments the state must have made were another reason.

“The foreign trade is getting worse: the negative foreign trade balance is growing. From the other hand, we have a short loan this year, not government but a commercial one. May be short commercial loans have been paid off, but the sense doesn’t change. It was done at the foreign exchange market, this sum remains there,” the expert says.

Syarhei Zhbanau calls another item of government payments.

“We, unlike most countries, have positive rates of GDP growth and negative rates of industrial production. This has to be paid!” the expert says.

According to calculations of the International Monetary Fund confirmed by the National Bank, it has only 2,646,000 dollars in its reserves on July 1. Anatoly Drazdou says that national bankers estimate this sum of 3.1 billion dollars – the IMF doesn’t take into account the precious stones we have. This allows us to be quiet and not to worry about the stability of the ruble.

“this sum is not enough in long-term outlook, but enough for a short term,” Anatoly Drazdou says. “We shouldn’t worry about stability of the Belarusian national currency.”

However, economists are beating an alarm: our gold and foreign currency reserve should be three times as much. Three billion are not enough.

“This is too little! There are no precise figures, we have only approximate rules,” Syarhei Chaly says. “Firstly, volume of gold and foreign currency reserves must comply with volume of a short loan. Out short loan is 8-9 billion dollars. Or the reserve must provide for three-month import. Our reserve is too small. Even the IMF calculated before this loss that we should reach at least 5 billion by the end of the year.”