Belarus' National Bank devaluates currency by over 50 percent

[News_Editor]

Belarus' National Bank devaluates currency by over 50 percent

2011-05-24 04:46:48 GMT+7 (ICT)

MINSK, BELARUS (BNO NEWS) -- The National Bank of Belarus (NBRB) on Monday set the official exchange rate of the Belarusian Ruble against the U.S. dollar at Br 4,930 per $1, a devaluation of over 50 percent.

According to the BelTA news agency, the new rate will be effective as of May 24. In contrast, the exchange rate of the Belarusian Ruble against the U.S. dollar was Br 3,155 per $1 as of May 23.

The NBRB also informed that the value of the Belarusian Ruble was reduced by 54.42 percent in just one day, and by 71.62 percent in comparison with December 31, 2010. The exchange rate of the Belarus' currency against the Euro was set at Br 6,914.82 per €1.

The NBRB said that the new rates were made on the basis of cross rates of US dollar to other foreign currencies. In addition, the country's gold and currency reserves continue shrinking which caused demand for foreign currency.

NBRB added that as from Tuesday exchange rates used for selling, buying and converting foreign currency on the over-the-counter market and the foreign cash market can differ from the NBRB-set official exchange rate by 2 percent at most.

The financial institution advised using a cross rate calculated with the official exchange rates of Belarusian ruble to relevant currencies for the necessary conversion operations.

Belarus applied for a $1-billion loan from Russia and a $2-billion loan from regional organization Eurasec to stabilize the currency market. Belarusian President Alexander Lukashenko recently announced that he is negotiating a $6 billion in support aid from Russia.

Lukashenko spoke with his Russian counterpart Dmitry Medvedev and reportedly agreed on an initial $3.1 billion loan. The Belarusian president said the signing of the agreement will be done in the coming days.

Russian Finance Minister Alexei Kudrin said that Belarus could only be loaned $1 billion rather than $3 billion. Kudrin said that instead Minsk needed to accelerate privatization of state assets and turn to the International Monetary Fund.

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