By Andrei Makhovsky
MINSK, April 16 (Reuters) - Belarussian President Alexander Lukashenko hinted at rouble devaluation on Saturday, a day after making contradictory statements on the matter and blaming Belarus' economic and security woes on unknown enemies.
Having lost a quarter of its foreign currency reserves this year, Belarus has effectively maintained multiple exchange rates since March 30 in a bid to avoid official devaluation as Minsk sought financial aid from Russia.
However, on Saturday, after attending a subbotnik -- a day of volunteer community work -- in Minsk, Lukashenko indicated it could happen very soon.
Asked when the rouble's exchange rate would become balanced, Lukashenko told reporters: 'Exchange rate is a matter of a few days... Today or tomorrow we will improve the situation on the currency market.'
He said the government would also cut spending and lending -- steps the International Monetary Fund has urged it to take along with devaluation.
The Belarussian rouble needs devaluation of between 20-30 percent, analysts say, to reflect the country's large current account deficit.
Belarus has so far refused to let its currency weaken and on Friday Lukashenko said the devaluation was not yet needed.
PART OF A 'CHAIN'
This week, the already weakened nation experienced a fresh shock when a bomb blast tore through a packed metro station in central Minsk in the evening rush hour time on April 11. Five suspects were detained within the next two days.
Lukashenko has blamed the bombing on those seeking to destabilise Belarus and said the attack was part of the same 'chain' as the currency crisis and rumours of food shortages that have prompted brief panic buying of sugar and sunoil.
Belarus' foreign currency reserves have fallen by a quarter to $3.7 billion so far this year as the central bank tried to support the rouble until mid-March.
Last month, Belarus allowed a de facto 10 percent rouble devaluation on the interbank market and announced a hike in interest rates to encourage people to keep money in banks in the national currency.
It has, however, insisted on the use of the official exchange rate in retail cash transactions and on the currency exchange where exporters sell their foreign currency to the central bank.
Belarus has asked Russia for $3 billion in loans but Moscow says Minsk has yet to submit a credible plan of economic stabilisation. (Reporting by Andrei Makhovsky; Writing by Olzhas Auyezov; Editing by Alison Birrane) (olzhas.auyezov@thomsonreuters.com; +380 44 244 9150)
Keywords: BELARUS LUKASHENKO TIGHTENING
COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
MINSK, April 16 (Reuters) - Belarussian President Alexander Lukashenko hinted at rouble devaluation on Saturday, a day after making contradictory statements on the matter and blaming Belarus' economic and security woes on unknown enemies.
Having lost a quarter of its foreign currency reserves this year, Belarus has effectively maintained multiple exchange rates since March 30 in a bid to avoid official devaluation as Minsk sought financial aid from Russia.
However, on Saturday, after attending a subbotnik -- a day of volunteer community work -- in Minsk, Lukashenko indicated it could happen very soon.
Asked when the rouble's exchange rate would become balanced, Lukashenko told reporters: 'Exchange rate is a matter of a few days... Today or tomorrow we will improve the situation on the currency market.'
He said the government would also cut spending and lending -- steps the International Monetary Fund has urged it to take along with devaluation.
The Belarussian rouble needs devaluation of between 20-30 percent, analysts say, to reflect the country's large current account deficit.
Belarus has so far refused to let its currency weaken and on Friday Lukashenko said the devaluation was not yet needed.
PART OF A 'CHAIN'
This week, the already weakened nation experienced a fresh shock when a bomb blast tore through a packed metro station in central Minsk in the evening rush hour time on April 11. Five suspects were detained within the next two days.
Lukashenko has blamed the bombing on those seeking to destabilise Belarus and said the attack was part of the same 'chain' as the currency crisis and rumours of food shortages that have prompted brief panic buying of sugar and sunoil.
Belarus' foreign currency reserves have fallen by a quarter to $3.7 billion so far this year as the central bank tried to support the rouble until mid-March.
Last month, Belarus allowed a de facto 10 percent rouble devaluation on the interbank market and announced a hike in interest rates to encourage people to keep money in banks in the national currency.
It has, however, insisted on the use of the official exchange rate in retail cash transactions and on the currency exchange where exporters sell their foreign currency to the central bank.
Belarus has asked Russia for $3 billion in loans but Moscow says Minsk has yet to submit a credible plan of economic stabilisation. (Reporting by Andrei Makhovsky; Writing by Olzhas Auyezov; Editing by Alison Birrane) (olzhas.auyezov@thomsonreuters.com; +380 44 244 9150)
Keywords: BELARUS LUKASHENKO TIGHTENING
COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.