Belarus' economy facing meltdown

RUSSIA / FSU POLITICS - In Brief 31 Aug 2020 by Alex Teddy

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Threatened EU sanctions are sure to hurt Belarus' economy. Anti-government protests have been ongoing since the presidential election on August 9. In clashes 6 people have been killed.People are lining up to take out foreign currency. The media has reported that foreign currency cash is now in short supply. People seek USD and EUR. Some ATMs can no longer give out these currencies.The Belarusian Ruble has depreciated 11% since June 2020. On August 27 the currency was 2.66 to the USD - the lowest ever level. It is speculated that the currency will lose another 20% of its value by the end of 2020.Tekhnobank allows people to buy USD 300 maximum and withdraw USD 300 maximum from foreign currency accounts. Other hanks require 5 working days notice to withdraw over this amount. Outside the capital the rate for USD is even higher because USD are harder to find theNexta - a pro -opposition Telegram channel - says there is a rumor that the government would freeze foreign currency deposits. The government denied the rumor. The president assured people that the currency would not collapse. Not many people trust him. The state does not have the hard currency reserves to defend the currency. It has only USD 4.3 billion in reserves which is only sufficient for 5 weeks of imports. Economists say that any country should always have at least 3 months of reserves. Some people are exchanging their salaries for USD as soon as they can. The demand for dollars is five times higher than usual.Over 50% of corporate loans are denominated in USD. This adds pressure to the currency. Local companies earning in Belarusian currency that have to pay back loans in USD will face a crisis. Strikes at s...