BELARUS NEWS AND ANALYSIS
DATE:
05/04/2011
Belarus leader blames rouble run on car imports
MINSK, April 5 (Reuters) - President Alexander Lukashenko on Tuesday blamed a run on the Belarussian rouble
Belarus' central bank introduced restrictions on foreign currency trading and allowed a de facto 10 percent devaluation of the rouble last month after spending $1 billion -- a fifth of its reserves -- on supporting the currency in January and February. [ID:nLDE72U0HB]
Belarus imported more cars in the first quarter of this year than in the first two quarters of 2010, the customs office has said without providing any figures. Import duties are due to more than double in July.
Economists, including those at the International Monetary Fund, say Belarus' current account deficit reflects the weakness of its Soviet-style command economy and have urged Minsk to speed up structural reforms and devalue the rouble further.
They also linked Belarus' growing trade gap to a sharp rise in government lending and generous wage increases announced last year in the run-up to a presidential election last December in which Lukashenko secured a fourth term in office.
However, Lukashenko said on Tuesday a jump in car imports was to blame for the foreign exchange problems. Belarus will raise import duties on cars significantly from July 1 under a customs union deal with Russia and Kazakhstan.
"Of course, we have been weakened significantly by the car rush," state news agency BelTA quoted him as saying.
"(But) we will withstand this, so let people buy the cars that they want," Lukashenko said, adding that the situation would improve within a few months.
Belarussian officials have said they expect to secure about $3 billion in loans from Russia and other ex-Soviet nations in April or May.
But Moscow has demanded to see a credible action plan and analysts say talks over the loans may take longer than Minsk expects.
Russian central bank chairman Sergei Ignatyev, asked about the conditions for extending a loan, told reporters on Tuesday:
"I cannot tell you that, everything is being discussed now... We are holding consultations both with our Belarussian colleagues and the Finance Ministry."
Unconvinced by repeated pledges of exchange rate stability, Belarussians bought $500 million in foreign currency last month, up from about $75 million in the two previous months.
They also bought 470 kilograms of gold from the central bank in March compared with 209 kilograms in January-February and 184 diamonds compared with 263 sold by the bank in the previous two months, the central bank said on Tuesday.
(Reporting by Andrei Makhovsky; Writing by Olzhas Auyezov; Editing by Ron Askew)
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