Belarus reserves fall as pressure on rouble grows

By Andrei Makhovsky

MINSK, April 6 (Reuters) - Belarus' central bank reserves are at their lowest point in two years, the central bank indicated on Wednesday, after Belarussians rushed to buy foreign currency due to growing concerns over the value of their roubles.

Foreign bank reserves calculated according to the International Monetary Fund's standards were down at $3.761 billion as of April 1 from $4.023 billion on March 1, the central bank said in a statement.

Comparative figures showed that this was the lowest level in reserves since the global economic downturn of 2009.

Faced with rapidly declining reserves, the central bank halted foreign currency sales in mid-March as the government asked Russia and other ex-Soviet states for a $3 billion bailout package.

It has allowed the Belarussian rouble to devalue by 10 percent from the official rate on the over-the-counter market but analysts say it remains illiquid and further devaluation may be needed.

The bank has restarted forex sales this month but has said it would only sell as much as it can buy and would not deplete reserves -- which now cover only about one month of imports -- any further.

"Net foreign currency purchases by the population amounted to $768.1 million last month," the bank said in a statement.

When Belarus' reserves fell to a similar level during the 2009 global crisis, Minsk sought assistance from the IMF which provided it with a $3.6 billion facility.

But after the expiration of the IMF programme -- and in the run-up to the December 2010 presidential election -- President Alexander Lukashenko's government embarked on a spending spree that included generous public sector wage increases.

Lukashenko won the vote to secure a fourth term in office but Western governments have criticised the poll and the subsequent crackdown on opposition protests. The United States and the EU have since introduced sanctions against Lukashenko.

Minsk has not sought IMF aid this time and the Fund has said that "any future financial arrangement should be accompanied by a credible commitment to strong stability-oriented policies and an ambitious structural reform agenda". (Writing by Olzhas Auyezov; editing by Richard Balmforth and Patrick Graham)


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