Default Is Almost Here

The National Bank told where they got money from to pay off the debt for gas.

To make it possible for Belarus to repay the debt of 726.2 million dollars for the supply of Russian gas, money was taken from the country's gold and foreign currency reserves.

As the First Deputy Chairman of the Board of the National Bank Taras Nadolny stated at the conference "Digital Banking" in Minsk on April 19, the reserves are not supposed to "reduce", because the National Bank is working to use "other tools" to attract resources.

"We issue bonds; the Ministry of Finance is also working on the markets. Therefore, the reserves will not reduce, everything will be fine," – Nadolny said.

According to him, part of the money was taken from the gold and foreign currency reserves, part of the money – from the current liquidity, which does not apply to reserve assets, therefore, it will be possible to compensate the money taken from the reserves.

We remind, that the relations between Belarus and Russia have significantly deteriorated on the basis of unresolved gas problems. Russia has even sharply reduced oil supplies to Belarus in the third quarter of 2016. At the same time, Prime Minister of Belarus Andrei Kabiakou said at the beginning of the gas conflict that the price of Russian gas for Belarus should be $ 80 per thousand cubic meters.

As a result, the conflict dragged on for more than a year, until all the issues of oil and gas supplies were settled at a meeting of the presidents of the two countries, held in St. Petersburg, April 3, 2017. In this case, the Belarusian side fully recognized and repaid the gas debt, which exceeded $ 700 million, while gas prices will drop only to $ 129 for Belarus in 2018.

Meanwhile, if the currency from own reserves was "spent" on repaying the debt, while the Russian loan of $ 1 billion as well as help from the Eurasian Fund for Stabilisation and Development remain in the status of "promised", bankruptcy of the Belarusian economic model in the form of default (refusal to pay debts) will not take long to happen: without external support of the economy, the gold and foreign currency reserves would have been completely exhausted by the end of the year even without paying the gas debt; in fact, the volume of international liquidity at the end of March was less than the amount of payments on currency obligations to be paid within the next 12 months.

Maksim Hatsak, Belorusskaja Delovaja Gazeta