The devaluation of the Belarusian ruble in 2015. What is the devaluation of the Belarusian ruble and how does it threaten the population?
Considering the question of what is a devaluationof the Belarusian ruble, we will begin with the fact that the monetary unit of Belarus in the past few months has demonstrated a sharp strengthening in the basket of currencies. Parallel to the phenomenon, there was a significant decrease in the exchange rate of the currency in relation to the dollar and euro. According to experts, the economy of the state and the world as a whole became the prerequisite for such a situation in the country. In the period from January to November 2014, the strengthening of the Belarusian ruble occurred on average by 2.25% against the background of the euro, the dollar and the Russian ruble. The reason for this is the fall of the Russian ruble and the yield of the Euro-currency on the international market. If last year the question as to whether the devaluation of the ruble will be asked by many, today the answer to it is quite obvious. Will, and not alone.
Fears of fear?
According to the information provided by the NBrepublic, from the beginning of 2015, the cheapening of the national currency to the US dollar was 1.92%, and to the euro - 2.46%. And all would be nothing, but the population of the country is used to measuring the level of their wealth in American currency. As stated above, there was a strengthening of the monetary unit to the Russian ruble by about 18%. This fact does not change the devaluation mood. Since 2000, it has been decided to make forecasts and keep savings in dollars. Such a tendency pushes the devaluation of the Belarusian ruble in 2015 to be felt. According to analysts, it is the National Bank that regulates the exchange rate in the country, it is it that systematically reduces the cost of the ruble.
What will lead to devaluation?
Considering the question of what is a devaluationBelarusian ruble, we can not but pay attention to the causes of the phenomenon. The situation is caused by the fact that as a result of the decline of the world economy, the country stopped buying the currency in the volume in which it purchased earlier. Consequently, the influx of dollars does not block the outflow of currency from the state. Demand exceeds supply. The difference is covered by borrowing. This is the reason for the smooth fall of the national currency. The absence of factors that could radically change the situation shows only the continuation of the trend. The lack of a hard currency in the country indicates a significant revaluation of the Belarusian currency to the US dollar, which was at the level of 20-30% as of July 2014. With a high level of inflation, state goods are actively growing in price in international markets, import goods become more attractive for citizens of the country. Increasing the imbalance leads to the need for the state to begin devaluation of the ruble to eliminate disharmony within the foreign exchange market.
Rigid peg to the dollar - one of the causes of the phenomenon
Due to the tight binding of the Belarusian ruble to thedollar, as noted above, there is a strong imbalance in foreign markets. While the national currency is cheaper against the dollar, it is stronger in comparison with other currencies in the world. The government decided to send the exchange rate to free navigation, since it is no longer possible to maintain stability in this sector. Even before the crisis, the policy of the Central Bank was aimed at reducing the cost of currency within 1% per month. Eliminating a fixed rate should help solve export problems. The increase in external debt, the destabilization of the banking system - these are just temporary phenomena that will eventually go to the past.
What is the root of the problems?
In order to understand the question of whatsuch devaluation of the Belarusian ruble, you must first make an assessment of the economic situation. Preliminary data indicate that by the end of 2015, the devaluation of the national currency will reach a rate of 40-50%. One of the main reasons is an increase in the crisis phenomena at the nearest neighbor, in Russia, in a geometric progression. The country more than 60-70% depends on Russia, therefore, it will be more difficult to build partnership relations with each time. The current crisis differs from the problems of the past in that it is formed by several factors. These are not only internal causes, but also external ones, such as sanctions from the EU and the fall in the cost of oil. The credit rating of Russia is the last investment place and the pre-speculative level. The capital market for a neighbor of Belarus is closed, the value of money is growing, neighbors are not becoming more generous. In parallel, the value of money increases for the Belarusian business. Today, the refinancing rate in Russia is 8.25%, and in Belarus - 25%. These indicators will increase as long as the cost of oil falls and sanctions are still active. The circumstances described above will directly affect every citizen of the country through the rate of the ruble of Belarus. Significant adjustments in the development of events can bring future elections in the country.
What do forecasts say for 2015?
The question as to whether there will be a devaluationruble, or not, has already disappeared, but its volume can be questioned. The indicator at the level of 40-50% makes very few people happy. Problems can arise in such sectors of the economy as retail and the financial sector, real estate, and other areas targeted at the end user. President Lukashenko at a press conference spoke about the relevance of the ruble's release because of the currency panic of the population. The government has never planned to devalue the ruble, and the mortgage should always remain within the limits of the available. This decision is due to the fact that the government intends to preserve its gold reserves. The open policy of Belarus could not but feel the crisis in Ukraine and in Russia. Despite the panic, the course is still being monitored today. A change in the economic model is not planned. Moreover, it was announced to the public that the reasons for the devaluation of the ruble in 2015 are multilateral, fortunately, with time, the situation will radically change.
Devaluation expectations in societyinfluence on the increase in inflation due to the demand for currency and goods. The growth of the population's need for dollars, euros and even rubles is thwarted by an additional devaluation. This accelerates inflation. At the end of 2014, in order to bring down the demand for currency, the government introduced a commission for the purchase of foreign money at a rate of 30%. After the fall of the excitement, the percentage was canceled in 10% steps, which was accompanied by a fall in the value of the national currency by at least 7% each time. It was a step of the state towards businessmen. The interest for currency exchange was offset by the fall in the value of money.
What will happen next
If the situation in the country develops in such a wayformat and beyond, in the near future the question of what the devaluation of the Belarusian ruble is, will be replaced by the expectation of inflation. This will cause the growth rates on deposits, which will increase the desire of the population of the country to save. Practically there is no doubt that the devaluation of the ruble-2015 will continue for more than one month. What should the population do in this situation? Do not panic. This will be the most rational solution in the circumstances. A soft monetary policy can lead to the generation of one inflation by another, thus forming an inflationary spiral. If the phenomenon takes place, the government will first of all pay attention not to business and private economies, but to low-income strata of the population.
Devaluation at the end of 2014
The question of what the devaluation of the ruble is, notstrongly worried the public at the end of 2014. This is due to the fact that the phenomenon could not have been avoided. The reason for this were the problems faced by Russia's exports. Subjective and psychological factors provoked panic. In just one day, namely on December 18, Belarusians bought currencies in the amount of $ 80 million, which is several times more than the average sums. In the autumn of the same year, the volume of currency purchases did not exceed $ 5 million. The authorities almost immediately took drastic measures and decided to release the course in free navigation. In comparison with 2011, when the country's leadership did not do anything, the reaction was prompt.
What caused the currency depreciation in the market?
We will consider, to what the devaluation of ruble-2015 has resulted. What to do, everyone will decide on their own, but the consequences of the phenomenon can be assessed. A significant advantage as a result of the situation went to exporters. In this case, there is no need to expect a big push, as the main consumer of Belarusian goods is Russia (more than 43% of exports), and it is currently experiencing a recession. Economic growth is blocked by bank interest rates, which have become completely unaffordable for business entities. Many, considering the question of what the devaluation of the ruble means, say the fall in their earnings in dollar terms. Due to the pegging of the national currency at the same time to the dollar, euro and ruble, there is considerable instability. The devaluation of the ruble and mortgage on acceptable terms is almost incompatible. Today, the exchange rate of the national currency has become an indicator of the state's economy, a symbol of its unstable state.
What does the situation in the country say and is everything so bad?
The growth of the economy in Belarus increased 1.6 timesin 2014. In 2015, GDP growth is expected to be 0.2-0.5%. The growth of wages is expected in connection with the upcoming presidential elections. Devaluation is also associated with a reduction in financial assistance from Russia. The statistics says that during the first devaluation, citizens of the country purchased about 48,000 cars on the territory of Russia, despite the fact that in the country offers on buying motor vehicles are more profitable. The expenditure of funds was about 500 million. To support the exchange rate of the national currency, the government spent 760 million, which led to a reduction in gold reserves to 5 billion. Demand for currency pushed to increase the rate and further freeze of credit. The cost for foodstuffs, medicines and tariffs of state enterprises was frozen. Over-the-counter currency transactions turned out to be taboo until 2017. Having considered the question of what the devaluation of the ruble is threatening the population, it is worth mentioning about changes in rates on loans and deposits. They were completely tied to the exchange rate of the national currency.
What is the future preparing for us and what obligations did the country assume in connection with the fall in the price of the ruble?
In 2015, the state should fullyto pay out an external debt, the size of which is about 3 billion. The allocation of funds from the budget for settlement with partners should not affect the reduction in demand. The help from Russia in a material equivalent though will open flows of import, but the situation completely will not solve. The problem in the banking sector will remain unresolved for a year. This is due to the fact that foreign assets are located in the negative zone. Only rates of 50% or more can be rescued from losses on deposits that have been withdrawn. Having studied the question of what the devaluation of the ruble means for Belarus, we can say that this process is more than usual for the country. Since 2000, the national currency rate has sagged by about 10% in just a week at least 5 times. The rate is under pressure of increased demand for imports, wage growth significantly exceeds production at a fixed rate. The economy is constantly fueled by concessional loans and subsidized construction. Devaluation was never used to eliminate problems, as it was always followed by decrees on increasing wages. The economy of the country, thanks to the support of Russia, never fell into a deep hole.