BELARUS NEWS AND ANALYSIS
DATE:
29/07/2009
Belarus c.bank: Neighbours slow on currency swaps
Reuters News BELARUS-SWAPS/
MINSK, July 29 (Reuters) - Belarus is proposing currency swaps with neighbouring countries to help facilitate trade, but its potential partners have been slow to react, the head of the ex-Soviet state's central bank said on Wednesday.
Belarus, which won IMF help after the global credit crisis put its foreign currency reserves under pressure, has already agreed to a three-year currency swap with China worth 20 billion yuan, or almost $3 billion. However, the deal is not yet complete because of difficulties with Chinese legislation.
Central bank chairman Pyotr Prokopovich said similar proposals put to Russia, Ukraine and an unidentified European country had generated only a limited response.
"We are holding talks with practically all our main trading partners," Prokopovich told a news conference.
"I believe our task is to clinch deals with our neighbours to have all accounting done in national currencies. But our partners, unfortunately, are examining this issue rather more slowly."
The swaps are intended to simplify trade by eliminating the need for third currencies, such as the dollar or euro.
Belarussian currency reserves have been under pressure for nearly a year, but rose to $3.8 billion as of July 10 from $3.1 billion at the beginning of the month after Belarus received a $679 million loan tranche from the International Monetary Fund.
Prokopovich said China was proceeding with a review of its legislative provisions "and then the implementation of that deal can truly begin".
Talks with Ukraine, he said, had taken place this month, with discussions to resume soon.
"We are ready for such an accord right now. Unfortunately, the Ukrainian central bank has raised a series of questions," he said. "Together with Ukraine, we have a greater interest in this than with others."
Under the standby arrangement with the IMF, Belarus is still to receive two tranches totalling $1.36 billion and Prokopovich said he foresaw no difficulty in securing the tranches.
The IMF has praised measures undertaken by Belarus to combat the effects of the world financial crisis and increased the amount of the total credit to $3.5 billion from $2.5 billion. (Reporting by Andrei Makhovsky, writing by Ron Popeski; Editing by Ruth Pitchford)
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