Raiffeisen Expects ‘Shock’ 30% Devaluation of Belarus Ruble

By Boris Groendahl and Jack Jordan

Belarus may conduct a “shock” devaluation of its currency, weakening the ruble by 30 percent, according to Raiffeisen Bank International AG (RBI), owner of the east European nation’s fifth-biggest lender.

Local banks in Belarus can now sell foreign currencies at a rate that deviates as much as 10 percent from the official rate, compared with 2 percent previously, after the central bank relaxed its controls on the ruble on March 30.

Including that depreciation, Vienna-based Raiffeisen expects a devaluation of 30 percent, Chief Executive Officer Herbert Stepic told analysts today at a meeting in London.

Belarus’s gold and foreign-currency reserves slipped 6.5 percent in March as the government tried to close a current- account gap that was equivalent to 15.6 percent of gross domestic product last year. The trade deficit more than quadrupled to almost $2 billion in the first two months of the year from $468 million in the same period a year earlier, according to data from the National Committee for Statistics.

Raiffeisen owns 88 percent of Priorbank, the country’s fifth-biggest lender by assets. With units in 16 former communist countries, Raiffeisen ranks behind Milan-based UniCredit SpA and Vienna-based Erste Group Bank AG in terms of assets in eastern Europe.

“With the measures we have taken we don’t see significant risk for our engagement” in Belarus, Stepic said, adding that Priorbank has about 1.2 billion euros ($1.7 billion) in assets.

Russia ‘Moving Fast’

Russia may increase its influence over the former Soviet republic by “moving fast” and “taking over valuable assets,” Stepic said. Belarus is seeking a $3 billion bailout loan from Russia and former Soviet partners.

The immediate risks in Belarus “include an uncontrolled devaluation of the Belarusian currency or disruptions in economic output due to shortfalls in imported inputs,” Alexander Morozov, chief economist at HSBC Holdings Plc in Moscow, wrote today in an e-mailed note. “Significant external imbalances and the low level of international reserves pose a risk for sovereign credit.”

To contact the reporters on this story: Jack Jordan in London at; Boris Groendahl in London at

To contact the editor responsible for this story: Gavin Serkin at


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