BELARUS NEWS AND ANALYSIS

DATE:

16/08/2007

Belarus Ruble's Ambitions

Belarus will unhook its currency from the Russian ruble to tie it to the US dollar beginning in 2008. What motivated Belarus, political o economical reasons?

"Beginning in 2008, the National Bank intends to refrain from the policy of coupling the official exchange rate of the Belarusian ruble to the Russian ruble," the bank said in a statement.

Indexing the Belarusian ruble to the US dollar will help stabilize the Belarusian currency, and help Belarus increase its international trade, Belarus conceders. There are even more reasons: the weight of the US dollar on Belarus' currency exchange rates is more than Russian ruble's; Russian and Belarusian economical models differ; Belarus accumulates reserves in dollars and pays its gas and oil bills to Russia in dollars.

Still some economists call the decision political, saying it was tied to Belarus' open displeasure at Russia's decision to hike oil and gas export prices to Belarus earlier this year. The deterioration in relations between the Kremlin and Minsk can lead to the failure of creating economic and monetary union of two countries.

Source:

http://www.russia-ic.com/news/show/4557/