Ex-Official: Inside Info Suggests Foreign Currency Deposits Could Be Issued To Belarusians In Rubles

And for big depositors, they are preparing a “Cypriot scenario”.

Former official of the Ministry of Taxes and Duties, as well as consultant of the Security Council of Belarus Yauhen Bury told Radio Svaboda that foreign currency deposits can be issued to the population in Belarusian rubles at the exchange rate:

- In a country where “there is no time for laws” and everyone understands that “there is no bottom line”, one should not exclude the possibility of a repetition of the scenario of the 2013 Cypriot banking crisis. Then the Cypriot authorities were forced to confiscate a significant part of the deposits, the amount of which exceeded 100 thousand euros. I believe that today there is every reason to fear a repetition of the Cypriot scenario in Belarus. At the same time, the threshold for determining a large deposit in Belarus can be significantly lower than 100 thousand euros.

Withdrawal of part of the deposits of large depositors will be the most acceptable scenario for banks.

According to our sources, only 2,000 depositors hold about 80% of the total amount of all deposits. Naturally, many of them are members of the country's leadership or those close to it. Even the head of the National Bank Kallaur himself recently talked about his strategy of ruble deposits.

However, it’s the same as with the plane - they will not take everyone on board when leaving. Only the closest and most faithful will be warned about the future partial or complete confiscation of deposits. And even more so, no one will think about ordinary depositors who keep their hard-earned savings on deposits.

- Does this mean that only big depositors should beware?

- Not at all, no one is insured against partial loss of savings. We received an insider from bank employees that in the event of a shortage of currency in the banking system, a “presidential decree” may be issued ordering to give foreign currency deposits to the population in Belarusian rubles at the exchange rate. The first step in this direction has already been taken - from July 9, a new law will come into force, according to which, if a situation arises that poses a threat to the economic security and stability of the country's financial system, currency restrictions can be introduced for up to one year.

We decided to assess the likelihood of such a scenario.

To begin with, the foreign exchange deficit in the country can be caused by planned payments on the public debt, over 90% of which has been borrowed in foreign currency. At the interbank trading, we already see a foreign exchange deficit, since less than 10% of applications for the purchase of foreign currency are satisfied.

In 2021, Belarus must make mandatory payments on the state debt of $ 3 billion. Reserve assets of Belarus in foreign currency over the past 16 months have decreased by half - from 5.6 to 2.8 billion dollars. What does this indicate? That without attracting new external lending, at some point the Ministry of Finance will not have enough currency for the next repayment of government loans. And if the Belarusian rubles can be “printed”, then it is more difficult with the currency. Therefore, the easiest way out for the government will be to forcefully change the money of the population by issuance of the foreign currency deposits in Belarusian rubles. As far as we know, preparations are in full swing.