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It Is about to Be the Default

46
It Is about to Be the Default

Lukashenka has twice less gold than it is required to avoid default.

As of February 1 gold and foreign currency reserves of Belarus amounted to $4.985 billion.

Scheduled repayment of internal and external liabilities in foreign currency has become the "brake" for growth of foreign reserves, BDG writes.

Former head of the National Bank Stanislau Bahdankevich believes that Belarus has only a half of the needed foreign exchange reserves.

- In 2016 foreign reserves of Belarus increased by $751.4 million and equaled to $4 billion and 927.2 million. How safe is this "airbag"?

- Belarus needs at least $10 billion.

These reserves perform two key functions - external debt guarantees, otherwise, the default is declared, and stabilization of the monetary constitution. At least three-month import is required, that equals to $10 billion.

- Service of a sovereign debt in foreign currency is planned at $3.4 billion in 2017, thus, $1.8 billion goes to repayment of the external debt. Foreign reserves are enough only to cover debts...

- As usual, Belarus does not pay them. The authorities constantly tale loans - last year the external debt increased by more than a billion dollars and the domestic one increased as well. The domestic debt also includes loan notes in dollars issued by the Ministry of Finance within the country. It is not normal when the government take loans from people in dollars. Formally, the leadership expresses desire to reduce de-dollarization, and actually even increases it. So, the reserves are required not only to repay external debts, but also domestic ones.

- Fitch Ratings agency affirmed long-term default ratings of the emitent of Belarus in foreign and national currency at the "B-" level with "stable" forecast. Are default risks high?

-It is the lowest positive rate. C is bankruptcy, default; B is something positive, A is a good indicator.

"B-" is the lowest stability index of both national currency and economy. But this is a normal index for the country in recession. There are not so much overdue debts, and there is none at the state level, I think. The leadership does not pay gas debt of $550 million to Russia, but we don't take it into account.

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