Belarusian ruble
From Biocrawler, the free encyclopedia.
Belarusian rouble (ISO-code BYR, before 2000 - BYB) is the official currency of Belarus. The short sign used for the Belarusian ruble is Br. 1 rouble is formally divided in 100 kapiejkas. There are banknotes issued in the denominations of 5, 10, 20, 50, 100, 500, 1000, 10000, 20000 and 50000 Br. There are no coins or banknotes issued in kapiejkas.
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Name
The name of the Belarusian currency comes from the Russian rouble and was left after the collapse of the Soviet monetary system and Belarus' refusal to introduce a national currency - the taler.
History
At the beginning of 1992, during the breakdown of the common Soviet monetary system, a temporary coupon system was introduced in Belarus.
Beginning with June 1, 1992 operations with Belarusian non-cash money started being carried out by Belarusian banks. In the end of June 1993 the withdrawal of Russian and Soviet roubles from the turnover began. The Belarusian rouble became the only valid payment instrumentto be used inside of Belarus. Although in September there was a new agreement signed by Kazakhstan, Armenia, Russia, Belarus, Uzbekistan and Tajikistan with the purpose to to establish a united post-Soviet monetary zone, at the same time, a project of introducing a new national currency, the taler was started in Belarus.
Monetary policy of the Łukašenka regime
From the very beginning, the government of Belarus started promoting an integration with Russia. The idea of unifying two monetary systems, to be exact - of Belarus' becoming part of the Russian monetary system, was actively discussed. The 1994 election of Alaksandar Łukašenka to the presidency began a policy of cultural and political denationalisation and russification of Belarus. In these conditions, the idea of introducing the taller was discarded.
Łukašenka's regime stopped market reforms in the country, in 1996 the National Bank was put under governmental control, which violates one the basic principles of an effective market economy. The National Bank has lost the ability to carry out a policy independent from the government.
Two National Bank presidents, (Stanisłaŭ Bahdankievič and Tamara Vinnikava) resigned as a protest against the National Bank's subordination to the government. As a result Piatro Prakapovič - a loyal supporter of Łukašenka without any formal financial education - was appointed president of the National Bank.
The policy of the Belarusian regime caused a heavy economical crisis. By the beginning of 1997 the devaluation of the rouble to US dollar was 35.5%.
The aim of state monetary policy was to narrow free price formation on the national monetary market. Massive restrictions in trade with currencies for companies and individuals were introduced. An enormous black currency market arised.
As a result, at the beginning of 1999 the official exchange rate was 2-2.5 times lower than the shadow rate. These "double standards" influenced most official reports of that time that spoke of "gigantic economic grows" of the Belarusian economy. When indexed by the real exchange rate of the rouble, most of these figures were negative.
The dull economic policy of the state needed more and more monetary support. The government-dependent National Bank started being used by the regime as a printing-press for non-backed money. Between 1996 and 2000 the volume of unpaid state liability to commercial banks rose by more than 140 times. The National Banks gave loans to credit institution to support their liquidity. A critical state of the banking system was caused by the pressure of the state that demanded from the banks to credit the unprofitable agriculture. As a result, iin January 2000 10 of 27 Belarusian commercial banks were in the process of liquidation.
The money supply growth exceeded the GNP by more than 500 times. Even the official exchange rate went in 1995-2000 down by 30.2 times. In September 1999 the first 5,000,000 Br banknote was issued. The consumer Price index rose by 74.2 times, the income of the people went down. Because of uncontrolled emission by the Naitonal Bank the Belarusian rouble practically stopped being used in foreign-economic account.
Monetary "integration" with Russia
From the beginning of his presidency, Łukašenka began to speculate on the idea of an integration with Russia and to undertake steps in this direction, which is supported by Belarusian conservatives and Russian nationalists. From the beginning, there was also an idea of introducing a united currency for the Union of Belarus and Russia. Art. 13 of the 1999 "Treaty of Creation of the Union State of Russia and Belarus" forseed a unified currency.
The change to a common currency ment the creation of a united central bank or angency. The placement and control of such facilities caused a harsh discussion broke out. The main debate was whether it should be Moscow (the Russian capital), Minsk (the Belarusian capital) or both at the same time.
After the election of Vladimir Putin, Russia took a more pragmatical and determined position in the question of integration with Belarus.
In 2000 the National Bank of Belarus had to take urgent measures. The rouble was denominated in 1000 times, the shadow exchange rate released as official, currency exchange liberalised. Stability of the exchange rate became prior for the National Bank, as it was a demand from the Russian side.
In December 2002 on a meeting of prime ministers of Belarus and Russia, it was declared that at the beginning, the Russian rouble would be introduced as a common currency. It was planned that since July 1, 2003 the Russian rouble would be introduced in Belarus for banking operations and completely replace the Belarusian rouble on January 1, 2004. In 2007 or 2008 a new supranational currency should be introduced.
The Belarusian regime started to sabotage the integration with Russia as Łukašenka lost chances to become president of the Union. Although technical and economical conditions were declared to be created, Belarus never introduced the Russian rouble. The date was postponed further and further. Today experts deny a probability of an indroduction of a common currency for Belarus and Russia.
External links
- National Bank of the Republic of Belarus (http://www.nbrb.by)
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