Belarusians Withdrew More Than Half of Foreign Currency Deposits From Banks

At the same time, the country has resumed the rapid growth of the ruble money supply.

For 20 months, the population's currency pockets have lost more than USD 2.3 billion. At the same time, the country has resumed the rapid growth of the ruble money supply, writes banki24.by.

The statistics on the state of the money supply come out in two main sections - on the 1st day of the month and on average for the period. In the first case, the data may be subject to calendar distortions, since the beginning of the month may fall on weekends. On the contrary, in averaged indicators, calendar peaks are most often smoothed out.

Therefore, below we use the information on the average money supply for September 2021. In September 2021, the broad money supply grew by only 0.5% against the same month in 2020. At the same time, in the summer months, there was no growth in the aggregate money supply compared to last year.

Weak growth of broad money supply is associated with a fall in its currency component. The basis of the money supply in the country is the deposits of enterprises and the population. Belarusians take foreign currency deposits from banks, and this negatively affects the amount of money in their accounts.

According to the main directions of monetary policy for 2021, the broad money supply on average in December should grow by December 2020 by no more than 7-10%. So far, the officials are quite within their own guidelines.

But the ruble component of the money supply recorded a sharp rise to the level of the previous year. In September 2021, compared to the same month in 2020, the ruble supply increased by as much as 16.2%. Such high growth rates are due to the effect of last year's low base. If in August 2020 the ruble money supply grew by 11.7%, then in September 2020 it grew only by 2.9%.

In October-December, the effect of a low base on the dynamics of rubles in accounts will only intensify. Therefore, in the 4th quarter, other things being equal, it is worth expecting a further acceleration in the growth rate of the ruble component.

According to the Belarusian methodology, deposits of legal entities and individuals are divided into transferable and others. Transferable deposits are mainly demand accounts: card accounts of citizens and settlement accounts of enterprises.

But other deposits are just what can be attributed to deposits in their popular understanding. This is money that is deposited in banks at a certain percentage and for a certain period and, as a rule, without the possibility of early withdrawal of the deposit from the bank.

The deposits of individuals in Belarus are characterized by the dominant share of foreign currency. On average, only 32.7% of household deposits were in rubles in September 2021. This suggests that the remaining 67.3% are denominated in foreign currencies.

For foreign currency deposits of the population, the outflow of funds from banks has been observed for 20 months in a row. During this period, individuals took an equivalent of 2.311 billion USD from banks. The historical peak in the amount of foreign currency deposits (in terms of dollars) was noted in October 2015.

Since then, balances on other foreign currency deposits of individuals fell by USD 3.929 billion. In percentage terms, Belarusians withdrew about 50.2% of foreign currency deposits from banks.