By Bogdan Penkovsky
However, the National Bank refutes these claims. “We’re convinced that devaluation is not an efficient instrument,” asserts the Head of the National Bank’s Information Department, Anatoly Drozdov. He adds, “Belarus can currently borrow money from foreign markets, if it wishes. It’s not difficult. Two years ago, such possibilities were limited for the country, due to the economic crisis, so devaluation was seen as the most appropriate solution.”
The National Bank does not deny the fact that the Belarusian Rouble’s value may gradually fall against the Dollar. However, this does not mean that the trend will continue. The major financial institution of the country is ready to limit fluctuations in the Belarusian Rouble’s exchange rate against the basket of currencies (meeting forecasts for 2011 of plus/minus 8 percent).
Not long ago, the banking sector adopted its plan for the coming five years, at an extended session of the National Bank’s Board. As regards its monetary-credit policy, the National Bank promises to keep pegging the Belarusian Rouble against a basket of currencies. The share of currencies may be re-considered, while the central figure and the width of the fluctuation corridor are to be reviewed annually. “A gradual transition to a more flexible Belarusian Rouble exchange rate is our goal, to enhance the efficiency of exchange policy, taking into consideration the external and internal balance of the economy,” the National Bank explains.
At the same time, it plans to counteract speculation on the foreign currency market, which affects the rate of exchange. It also plans to smooth any sharp fluctuations in the Belarusian Rouble’s exchange rate.