The illegitimate government can freeze deposits or start issuing rubles instead of currency.
On July 9, Belarus will introduce innovations in currency regulation and control. The authorities will be able to introduce currency restrictions, including a ban on foreign exchange and foreign exchange transactions. The Charter97 website spoke with the ex-head of the National Bank Stanislau Bahdankevich about the situation with the currency in Belarus.
- What currency restrictions can banks impose at the suggestion of the National Bank of Belarus? How wide is this toolbox?
- In our country, the authorities can impose any restrictions. Our laws do not work, so they can give a command so that all the money that citizens withdraw from their bank account be issued in rubles instead of currency. Perhaps for some time, they will set a limit on the issuance of their own money from the bank. Let's say there are 5 thousand dollars, but you can take only 100 dollars a month. The authorities can do whatever they want to prevent a fall in the exchange rate. A person should understand that if he keeps money in the bank, then the government can use these funds.
- How can these measures affect banks, enterprises, and individuals in Belarus?
- I believe that nothing good shines, no subject. There is a distrust of the banking system. You see, there may be such a situation that you have some amount in your account, but the power will limit you, and you will not be able to use your savings in full, but only a part. However, the population can withdraw this money in advance, without waiting for the deterioration of the situation.
- Why did the authorities take such measures right now?
- They have not yet gone, the decree suggests what will happen next. The illegitimate and unelected government expects a deterioration in the economic and political situation in the country, therefore, naturally, it thinks about how to protect itself. We see AMAP officers running around on the street with weapons and truncheons, now the authorities are trying to protect themselves with financial methods in banks. This is all evidence that not everything is good in our state, including in the economy.
- New US sanctions will lead to the fact that some Belarusian enterprises, primarily from the oil refining sector, will become unable to use dollars in payments for products. How serious can the currency deficit be in the financial system of Belarus? Could currency control measures be triggered by the anticipation of this deficit?
- The authorities, enterprises, and citizens may experience a shortage of foreign currency, especially those who need to repay a debt on foreign currency loans. It is quite expected that if there is a decrease in the efficiency of the economy, gross product, export does not increase, then there will be one or another default. All this can lead to the fact that Belarusian enterprises will not be able to pay their debts.
There is an economic and political crisis in the country, the people do not trust the illegitimate government. Even before this decree, I assumed that without any innovations, they would simply call Kalaur to the carpet, and he would follow any instructions. There is no legal basis in Belarus, in any area. We lack personal and financial freedom, as well as human rights.
The authorities can establish that the currency should be paid in rubles at the appointed rate. Any possibility of arbitrariness can exist in our economy, and business entities in Belarus, foreign investors, and buyers understand this.
I do not think that there will be a landslide fall in the exchange rate, perhaps it will strengthen for some time because the population and enterprises do not have ruble reserves. Consequently, the rate can be held because you need to pay for the currency with something. To buy dollars, rubles are needed, and if they are not, then we get exchange rate stability, but this retention is not based on a healthy and effective basis. Such a foundation is a fall into poverty.
- In March 2021, deposits of individuals in foreign currency decreased by another $ 90 million. Why do Belarusians continue to withdraw currency from deposits?
- In general, this is what we are talking about - distrust of the authorities, the desire to keep our savings under the pillow. This is a normal desire in a political and economic crisis. Suddenly tomorrow the authorities will give the command not to give out dollars, euros, and Russian rubles to citizens from their bank accounts. What to do next?
I want to note that when they say that Belarusians will die, it is not true. We have plots of land, potato, mushrooms, the ability to brew moonshine, which remained from partisan times. We will survive and gradually restore the economy and political structure. All this arbitrariness and recession will become a thing of the past, it never happens like this forever. We, the old ones, will leave, and the youth will create a new, legal, and civilized Belarus. I am 83 years old, and I believe that we are moving for the better, not the worst. The rise will be.
- Do you think the dynamics will continue to go down foreign currency deposits and what can this lead to?
- I would say that in the short term it will lead to a decrease in the standard of living. At the same time, remember that we still have 6 billion of reserve currency, commodity stock in the warehouses of enterprises, talented Belarusian people, we have good personnel. It's not all that bad.
It is very difficult to guess with a decline because a lot of leverage affects the state of the economy and politics. One can only foresee a further recession, a decline in living standards, a decline in production, a significant rise in prices in the consumer market. All this worsens the psyche and the level of our well-being. We get the same salary, but, to buy a loaf of bread, a piece of meat or sugar, you need to spend more. Living standards are deteriorating, and we can only wonder how quickly prices are rising. No administrative decrees can stop the rise in prices, and if you temporarily do this, there will be a landslide drop in the market. This has already happened to us.
If we talk about the revolution, then it is usually done by more prosperous people, when they have finally arrived at one's fingertips. Basically, not the most hungry, but people who have already begun to live with dignity, but want better, are not ready for the most radical measures. Our people are educated, and they see that there is such an opportunity. We are not worse in intelligence than the same Poles. Why do they have a pension of 1600 rubles, and we have 400? We think about it. We are educated, literate, but on the whole, we live poorly.
- What should ordinary Belarusians do in the situation of a currency deficit and a currency shock?
- My advice is to think in advance. Be politically literate, analyze, anticipate, actively participate in public and political life. This must be done. You see that the state will not save your savings, then take this money in advance and keep it in your moneybox. As a banker, I would not recommend this, but in the conditions of an illegitimate regime, when criminals are in power, then all means are good in order to save your welfare, children, family, and country.
We need to influence this government, take to the streets, if necessary, go on strike. In the end, it depends on the Belarusian people that we have an irreplaceable power. Changeability does not depend on Moscow, Washington, or Brussels. Only the Belarusians themselves can make sure that we have a legitimate and replaceable government.