The new head of the National Bank of Belarus and changes in the monetary policy
Chairman of the Board of Belarusbank Nadezhda Ermakova was appointed as the new Head of the National Bank of Belarus. Before the appointment Ermakova reported to Lukashenko, that the banking system and the foreign currency market of the country have stabilized completely:
the foreign currency exchange rates set by the National Bank reflected the reality without being constrained by administrative tools and that there was an inflow of deposits. At the same time, she said that the day before in “Belarusbank” the outflow amounted to "only" USD 360,000 and Euro 300,000 which was insignificant in her view. Alexander Lukashenko instructed the new Head of the National Bank of Belarus to reach the single currency exchange rate of the Belarusian Ruble in the near future.
The National Bank of Belarus allowed Belarusbank, Belinvestbank, Belagroprombank, Paritetbank and Alfa-bank until 1 December 2011 to buy cash foreign currency without selling it to the population via foreign exchange offices located in recreational facilities (without specifying what stands for a “recreational facility”). Currency collected that way would be sold to citizens for social purposes.
The National Bank allowed the use of foreign currency in transactions between the residents in leasing agreements. This provision is valid until 1 January 2013. In autumn 2009 the National Bank canceled the use of foreign currency in a number of operations between residents, including leasing agreements. Several months ago a number of businesses appealed to the National Bank with a request to return the possibility of settlements in foreign currency.
Regardless of other candidates being more qualified and better experts, the authorities bet on a “gray mouse”, who knows banking very well however does not understand macroeconomics. Therefore the main criterion was loyalty rather than professionalism. Obviously, Ermakova will continue the existing policy of administrative regulation and redistribution. It implies that the credit (emission) support to individual enterprises will continue, as well as the sale of foreign currency to the population for "social purposes" only (traveling due to illness of a family member or linked to a funeral, treatment or in some cases studies). The National Bank has finally lost its independence: the monetary and exchange rate policy is now determined solely by the Presidential Administration.
President Lukashenka has met with the head of Chechnya Ramzan Kadyrov, who visited Minsk and the Minsk Automobile Plant. Minsk has always sought to have independent links with Russian regional elites, partially, to compensate for the Kremlin's diminishing interest in Belarus. In recent years, Belarus’ contacts with the Russian regions have been extremely intense. However, with some leaders of Russian regions, primarily heads of large republics, communication was more difficult to build. As many analysts in Minsk suggested, Minsk could regard contacts between President Lukashenka and the head of Chechnya as an additional communication channel for relieving tension in relations with the Kremlin. However, most likely, a trusting relationship with Kadyrov is a value for Minsk as such, provided Kadyrov’s broad business and political interests, and a high degree of autonomy for the Chechen leader from the Kremlin.