By Vladimir Yeremeev
There is nothing as sure as change, as seems to be true of the local population’s view of foreign currency loans. The crisis provoked a break in such credit in 2009 and, on January 1st, 2011, the service was revoked indefinitely. Despite differing views on such loans, most experts agree that de-Dollarisation is necessary for the stability of the national economy.
Financiers aim to make all citizens trust our Belarusian Rouble. However, does this trust rise as a result of reducing banking services in foreign currencies? Loans have disappeared but demand for foreign currency cash continues to run high. People hurry to exchange offices to assuage their psychological concerns, rather than from economic necessity. It’s impossible to say that the situation lacks logic, since many essential goods and services’ value is assessed in Dollars, despite being priced in local currency!
We can reword famous Prof. Preobrazhensky from Bulgakov’s Heart of a Dog saying that de-Dollarisation begins not in banks or exchange offices but in our heads. Many Belarusians do believe that our domestic currency is stable and that the economy will grow, but their brains tell them to save in Dollars or Euros, despite interest rates being lower than for Rouble savings. Why do so many of us reject the opportunity to earn more interest? It must be due to our fear of fluctuations in the currency exchange rate and the negative influence of external factors, among other risks. No doubt, these factors seriously influence our ‘monetary’ preferences.
Surfing websites devoted to property, it’s evident that 95 percent indicate prices per square metre in Dollars (for houses, flats and offices). The same is true of car dealers, although all payments are actually made in Belarusian Roubles (calculated at the National Bank’s rate). Internet shops price white goods and electronics in Roubles but always give the Dollar price alongside, with the exchange rate placed on the home page. Of course e-traders automatically change their prices to reflect changes in exchange rates. Trading centres and markets face a similar situation. Low quality products are ‘measured’ in Roubles but shop-boutiques prefer to receive American and European currency. The same approach is applied by sellers and small manufacturers of furniture. Meanwhile, tourist agencies fix prices for foreign trips in foreign currency only.
Belarusian legislation prohibits payments in foreign currency in the retail sphere but no one bans sellers from tagging with prices in a foreign currency. This strategy neither infringes our foreign currency legislation, nor affects the rights of consumers. The Head of the Department for the Control of Advertising and Protection of Consumer Rights at the Trade Ministry, Irina Baryshnikova, believes sellers have the right to choose a currency for the calculation of prices.
The Belarusian Rouble has every chance of remaining stable, since the country owns sufficient gold-and-currency reserves, allowing adequate liquidity for the banking system. Export-oriented branches are the focus of development while much effort is being directed at attracting foreign investments. All we lack is ‘glamorous packaging’, since a positive psychological approach requires encouragement. We must attract professionals: market researchers, PR managers and advertising agents. Of course, a promotion campaign will be expensive but it will certainly yield profit. Financier would agree that servicing of foreign currency cash flow is costly. People’s inconstancy in buying Dollars, then exchanging them into Belarusian Roubles, before later choosing Euros, is not only unjustified but is an expensive and senseless waste of time and of exchange fees.