China Drastically Reduces Loans To Lukashneka

What happened?

According to the Ministry of Finance, in January-July this year, the government of the Republic of Belarus repaid $410.9 million of debts to Chinese banks, and borrowed only $33.4 million from China, banki24.by reported.

Export-Import Bank of China provided the funds to Belarus. Such a significant reduction in debt to China is probably a consequence of the difficult financial situation in China itself, where many banks are facing bankruptcy, while the country lacks dollars and the yuan is rapidly falling against the dollar.

Against this background, debt relations with Russia look quite favorable. During seven months of this year, the Belarusian government has attracted $448 million from the government and banks of Russia, while only $403.9 million has been paid.

Thus, Belarus is actually refinancing its debt to Russia, even without a special government loan. In total, in January-July 2019, the government of Belarus received loans of Br559.8 million from abroad.

In addition to loans from China and Russia, $57.9 million was received from the IBRD and $20.5 million from the EBRD and the NIB. The geography of repayment was wider. In addition to payments to China and Russia, $176.5 million was paid to the Eurasian Fund for Stabilization and Development, $36.6 million to the IBRD, $0.8 million to the EBRD and the NIB, and $0.7 million to the US Commodity Corporation.

As a result, the external public debt of Belarus decreased by $0.4 billion over seven months (including exchange rate differences) and amounted to $16.5 billion on August 1, 2012. Domestic public debt increased by Br0.3 billion over the period under review and reached Br9.2 billion on August 1.

The Ministry of Finance placed bonds of $651.2 million in the domestic market, while redeemed bonds of $160.3 million and Br227.2 million. The total foreign currency and ruble public debt of Belarus has decreased by Br2.6 billion since the beginning of the year and amounted to Br42.7 billion on August 1, 2019.

Most of this decrease is due to the decrease in foreign currency exchange rates against the Belarusian ruble.