Treasury of Trust
The government and National Bank are to increase gold and foreign currency reserves to $3 billion by 2010
The chairman of the National Bank, Petr Prokopovich, reported that the situation with the crucial reserves was stable, and the stock of gold and foreign currency has recently hit the $1.5-billion mark. The figure is expected to double by 2010, which is a rather complicated task: although the government and the NBB have developed an action plan with a schedule to gradually increase the reserves, a light decline has been observed.
According to Petr Prokopovich, it remains insignificant, at around $23 million, and there are good reasons to have it: in summer and autumn Belarusians were traditionally buying more foreign currency than selling, for people require foreign currency to go on vacation. Besides, the rise in personal incomes encourages the demand for imported consumer goods.
Another good reason is an increase in imports of production equipment as part of the production upgrade campaigns. Imports are growing faster than exports now, so the country spends more that before and does not have a good chance of accumulating reserves. A natural instruction from President Alexander Lukashenko to the government and the National Bank was to aim at attaining a foreign trade surplus this year and work out a program of arrangements to boost exports of commodities and services and cut imports.
One of the ways to deal with the trade deficit is to encourage domestic production of consumer goods in order to reduce non-critical imports. The president approved the initiative and noted that new productions should be established in smaller cities and towns in order to give an impetus to local production and development. Besides, the president instructed the government to draft a set of measures to attract foreign investment in the Belarusian economy on the whole and prepare specific projects to invite investors in Belarus’ agribusiness.
These efforts will facilitate the NBB’s activities aimed to accumulate gold and foreign currency. Petr Prokopovich is certain the reserve will start growing by the end of the year. “The situation with the gold and foreign currency reserves and the exchange rate of the Belarusian ruble is stable and will remain stable for years to come,” the NBB chairman said.