Goodbye Currency!

Accounts of Belarusian state banks in Europe were closed.

The Belarusian banking system has felt the brunt of European and American sanctions imposed in the summer in response to the repression and forced landing of Ryanair flights.

European banks began to massively close correspondent accounts in dollars and euros for the Belarusian "government," without which it is impossible to conduct transactions in two key world currencies.

Last week, the correspondent accounts of Belarusbank, Belinvestbank, and Belagroprombank were closed by Deutsche Bank, a key correspondent bank for state credit institutions of the republic, finanz.ru writes in a review article.

Belagroprombank, one of three banks that fell under EU sanctions, lost its correspondent relations not only with Deutsche but also with all European colleagues, including German Commerzbank, DZ Bank, Italian Unione di Banche Italiane, and Polish PKO Bank.

Even Russian "state" companies, including Sberbank, VTB, and Rosselkhozbank, have refused foreign currency transactions to Belagroprombank.

A similar situation has developed in Belarusbank and Belinvestbank, which were also included in the EU sanctions list.

The two thin threads that hold the state banking sector and which can break at any moment are VTB's European subsidiary (which conducts operations for Belarusbank) and Moscow's TKB Bank, which holds euro accounts for Belagroprombank.

Isolation from the global monetary system has already hit the Belarusian business. The movement of currency is technically possible through “small airfields” in the form of small Belarusian and marginal Russian banks, but this all makes it very difficult to fulfill existing contracts and jeopardizes new ones, one of the entrepreneurs complained.

“It used to be a scandal for a three-day delay in payment, now two weeks is delay normal because money travels halfway around the world to get where it needs to be,” he says, adding that the private sector is likely to move to other banks or look for opportunities across neighboring countries.

Recall that, on June 24, the European Union announced the imposition of economic sanctions against the regime of Aliaksandr Lukashenka for "serious violations of human rights," "brutal suppression of civil society," as well as the forced landing of the Ryanair flight in Minsk, which the West qualified as air piracy.

All Belarusian banks with a state share of more than 50%, as well as separately subsidiaries of Belarusbank, Belinvestbank, and Belagroprombank, fell under the sanctions prohibiting the provision of financing for a period of more than 90 days.

Lukashenka, commenting on the EU decision, said that the sanctions mean "powerlessness" and called for proving this in practice to "scoundrels on the other side of the border."