19 January 2018, Friday, 18:52

Leu Marholin: National Bank to face hard times


The Anti-Crisis Fund has understood nothing good can be expected from Minsk in the current loan programme and offered another “carrot”.

Economist Leu Marholin spoke to charter97.org about the interest demonstrated by the Belarusian authorities in the new loan programme of the EurAsEC Anti-Crisis Fund.

“The Anti-Crisis Fund hasn't invented anything new. It just cloned the instrument used by the International Monetary Fund. It was a stand-by loan with conditions to carry out certain reforms and stabilise economy before applying for further loans. To some extent, it motivates Belarus to fulfil the obligations, under which it took a $3bn loan two years ago. Belarus is to receive the last tranche of the loan now. The Anti-Crisis Fund seems to understand that Belarus can propose nothing significant in the loan and decided to use a 'carrot' to encourage Belarus to make structural changes,” the economist said.

He stressed that Belarus's economy saw no significant changes.

“Signs of crisis are becoming more and more obvious every month. Two months ago, the Anti-Crisis Fund said the Belarusian economy was okay, but some indicative criteria had not been reached, but Belarus still had time to do it. Now the Fund makes some criteria obligatory for receiving the last tranche. It means that the Anti-Crisis Fund and the Eurasian Development Bank understand that nothing has been done in the Belarusian economy and its state is far from being stable,” Leu Marholin said.

He is confident the National Bank will have problems not only with increasing foreign currency reserves, but also with keeping them on the current level.

“Shrinking foreign currency reserves rise concerns not only of the country's foreign partners, but also of ordinary people. When people see the reserves are melting down month by months, they regard it as a warning for those preferring to keep money in Belarusian rubles. They will begin to withdraw bank deposits little by little, which will be another blow at the foreign currency reserves. I think the National Bank will face hard times. It will be difficult not only to increase reserves, but also to keep them on the current level,” the economist sums. up.