20 April 2021, Tuesday, 6:33
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Belarusian Authorities Waste Foreign Assets

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Belarusian Authorities Waste Foreign Assets

The decrease in the value of assets goes in line with the reduction of gold reserves.

The officials have published information about the size of foreign currency assets and their dynamics in 2021. It is also known what is left in the storage of the banking system, writes banki24.by.

The National Bank, like any other regulator, has foreign assets and liabilities. To paraphrase, assets are the NB claims to non-residents, while liabilities are obligations to foreign countries.

Accordingly, net foreign assets are the difference (balance) between gross assets and liabilities. On March 1, such a balance amounted to USD 6.606 billion in equivalent. By comparison, the net assets amounted to USD 8.203 bn on 1 March 2020. On 1 January 2020, they equalled USD 8.815 bn.

The drop of the net assets is due to the embezzlement of the gold reserves for currency interventions during 2020. Foreign assets of the NB are nominated in freely convertible currencies (FCC) and limited convertibility currency (LCC). In the first case, these are currencies like the dollar and euro, and in the second - currencies like the yuan and the Russian ruble.

As of 1 March 2021, the NBB assets in FCC amounted to $6.430 billion in equivalent, while in LCC - $904.5 million. Liabilities in FCC reached $676.1 million, while in LCC - $51.9 million. In 2021, the National Bank had a noticeable shrinkage of fx assets both in FCC and LCC.

"Freely convertible" assets dropped by $355.4 million, "limited convertibility" - by $391.4 million. The drop in the value of assets ran in parallel with the reduction of gold reserves in Belarus.

Within the country, the regulator has requirements for government agencies, other depository institutions (banks), financial institutions, real sector organizations and individuals.

If the claims on a net basis are above zero, then other sectors owe the National Bank, if below zero, then the NB owes other sectors. As of March 1, the net claims in "loans" amounted to 2.640 billion BYN, in foreign currency - minus 4.799 billion USD.

All of the negative claims in foreign currency are the obligations to the government (read: deposits of the Ministry of Finance). By March 1, they were $4.840 billion. Also, the government kept 1.176 billion BYN in the accounts of the National Bank.

As of March 1, the NB claims on other depository institutions amounted to 2.328 billion BYN and $41.8 million. It is clear that despite the crisis, the regulator did not inject liquidity in foreign currency into banks. As for commercial banks, government securities in their portfolio reached 3.103 billion USD, although, on January 1, the portfolio amounted to 2.417 billion USD.

The sharp increase in the portfolio one can explain by the government's support of the BMZ. On the other hand, the government kept money in banks. In 2021, the number of foreign currency liabilities to the Ministry of Finance rose from USD 843.9 million to USD 1.089 billion.

One can assume that the government has placed more resources in banks to support them. In any case, the head of the Ministry of Finance Seliverstau spoke about such measures.