31 January 2008
Russia’s loans will not be needed to keep the rubel stable, National Bank head says

The $1.5 billion that Belarus has borrowed from Russia and the $2 billion that it may borrow will not be needed to keep the Belarusian rubel stable, Pyotr Prakapovich, head of the National Bank of Belarus (NBB), told reporters in Minsk on January 30.

“There so far has not been a need to spend the borrowed money for this purpose, nor, I hope, there will be any,” he said.

He explained that the NBB had a $309-million currency intervention surplus in 2007. “I think such conditions will remain this year,” he noted.

The borrowed money will be used, above all, for investment projects, he said.

“Obtaining a loan gives us a double benefit,” Mr. Prakapovich said. “On the one hand, it can be sold to the National Bank and the Belarusian rubels can be used for investment projects, especially those that require budgetary support. By offering budgetary loans, the government can stimulate economic growth in the country.”

On the other hand, the borrowed funds could be used for maintaining the rubel’s exchange rate, although there is no need for that at the moment, Mr. Prakapovich said.

The NBB supports the government’s effort to negotiate a loan and in particular its negotiations with Venezuela, he said, adding that this money is “needed for the development of our economy.” He did not specify the amount of the possible Venezuelan loan, saying that the government, not the NBB, is responsible for the negotiations.