Belarus will allow its rouble to float freely from the middle of September, president Alexander Lukashenko said on Tuesday in a surprise announcement.
But, there is a “but”: the exchange rate for energy payments will stay “preferential” and export-focused companies will have to convert 30 per cent of their revenues back to roubles.
“The rate of the Belarus rouble will be determined by supply and demand, as in case of any other good. We are not planning to support the exchange rate artificially,” Lukashenko told the government and the central bank.
The official exchange rate of the Belarus rouble, as set by the central bank daily, was BYR 5,065 per US dollar on Tuesday afternoon. However, with foreign currency being virtually unavailable for many, black market rate often reaches as much as BYR 8,000 per dollar.
The former Soviet republic devalued its rouble by 36 percent in May, in an attempt to resolve its balance sheet problems.
Lukashenko, nicknamed “Europe’s last dictator” by Washington, said on Tuesday that the Minsk exchange will open an additional trading session where foreign currencies, such as the dollar and the euro, will be available, while in the main session foreign currencies will be offered only for gas and electricity payments.
“After the additional session is opened, all banks’ exchange offices will be obliged to conduct selling and buying of foreign currencies at market prices,” he said.
The announcement comes only a day after the Royal Bank of Scotland decided to refrain from helping the country’s authoritarian government with future capital raising efforts, citing social and ethical issues as the reason.
Belarus devalues its currency, FT
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