Leanid Zlotnikau: Devaluation is to happen in the next few days

A dollar should cost 16 000-17 000 Belarusian rubles.

Belarusian economist Leanid Zlotnikau commented on a well-known "Black Friday" to charter97.org. In particular, he explained the degree of price increase for the final consumer, temporary trade suspension by private enterprises, commented on the perspectives for business in future, on the situation when US dollar is in a ready access and further course when its exchange rates swings are over.

- Now many people on the Internet are arguing whether it is right to consider the innovations of the National Bank of the Republic of Belarus the devaluation. How do you explain the current situation with the currency in general?

- The devaluation was sure to happen due to its own reasons. This means that the country has a slight drop in amount of currency and in the foreign exchange market so the price of the currency should have risen. The onset of the financial crisis has been provoked by missing of currency traded at the same rate. In case of shortage of goods, the price will increase or the goods will have to disappear. What should a new currency exchange rate have been? It is hard to say. If we take the Russian ruble, for instance, the Belarusian ruble has strengthened against it twofold over the past six months. So, the purchasing power of the Belarusian ruble has increased twice against the Russian one.

- So, should the devaluation make up 100%?

- If we only worked with the Russian ruble as the currency, it would be necessary to have our course doubled. But we also have the dollar and the euro in our economic system. And the ruble makes up 40% of the total exports revenue. Therefore, the growth rate should not be doubled. It is hard to calculate the growth rate, but as a result a hard currency would rise by 80% against the Belarusian ruble, i.e. the exchange rate would be equal to about Br16. 000 -17. 000 as the result of the devaluation. But we already have the tax, devaluating our currency.

- So, have the authorities worsen the situation? Could we have the lower devaluation rate without additional "multiple steps"?

- As a result of all this, it can occur that the dollar may rise twofold now. It may either be now or a little later, I do not know. As in 2011, the time of the devaluation and dollar appreciation, we should observe the currency rate swings now. In the first half of 2012 the National Bank bought up $2.5 billion without further appreciation.

Both economic entities and the population will sell the currency to the State at one price and buy it at price 30% higher. Now, depending on the currency exchange rate fixed by the National Bank of the Republic of Belarus, the population will buy currency at artificial overvaluation. Now the currency in the grey market may cost Br20.000. Can you recall the situation when in 2011 the dollar traded at Br8.000, but at Br12.000-15000?

- So, is this the ordinary thing for the current situation in the country's economy?

- Yes, it is. When someone is badly off currency, he is ready to buy it at any price. But as soon as the currency is available, the boom will be reduced. But the currency will be available for sale. Now trading sessions are to be held as it was before. As before there will not be the interbank market, but only tradings on currency and stock exchange. A certain currency rate will be fixed through tradings. Let's say tomorrow it will be fixed at Br12 000 per one dollar, so you will buy currency at Br15.600 (the price 30% higher). The next day the currency exchange rate will be fixed at 15 000, so it means, respectively, the currency will be traded at Br19.500 per one dollar.