Monetary trends in the Republic of Belarus in January – November 2009

Functioning of the monetary field in January-November 2009 can be characterised by the following processes:
- domestic currency market dynamics was influenced by the trade and payment flows;
- Belarusian rouble exchange rate tendency was determined by conditions on the world currency markets;
- a positive dynamics of time-deposits denominated in the national currency strengthened;
- an increase in normative capital and banks’ resource base proceeded;
- an increase in banking requirements to the economy, the major share of which was presented by economic entities was being demonstrated;
- a reliable and safe functioning of payment system was sustained.

1. Balance of goods and services and foreign exchange market

1.1. Foreign trade.  According to preliminary data on the balance of payment, with lower external demand in January-November, 2009 export of goods and services amounted to 22.2 mlrd. USD, import of goods and services totaled 27.0 mlrd. USD showing a drop as compared to January-November, 2008 by 36.5 and 30 percent respectively. As a result, foreign trade transactions formed a net import to the amount of 4 814.4 mln. USD (see Table 1.1)

Table 1.1
Information about external trade conditions of the
Republic of Belarus in January-November 2009.
mln. USD


January-November 2008 

January-November 2009 

January-November 2009 as % to January-November 2008

External turnover of goods and services

73 625.9
49 254.4
Export of goods and services
34 983.3
22 220.0
Import of goods and services
38 642.6
27 034.4

Balance of foreign trade in goods and services 

-3 659.3
-4 814.4

External turnover of goods

67 389.7
44 312.9
Export of goods (in FOB prices)
31 136.5
19 106.9
Import of goods ( in FOB prices )
36 253.2
25 206.0
Balance of foreign trade in goods
-5 116.7
-6 099.1

External turnover of services

6 236.2
4 941.5
Export of services
3 846.8
3 113.1
Import of services
2 389.4
1 828.4

Balance of foreign trade in services

1 457.4
1 284.7

Within the period of January-November of 2009 one could see a gradual improvement of gross conditions of external trade in non-energy goods (the ratio of export volumes to growth pace of import volumes). If, following the results of QI and QII of 2009 the volumes remained to be negative at amount of minus 21.4 and minus 13.2 percent respectively, then, following the results of QIII, the volumes formed positive (14.3 percent) and November’s indicators made 24.1 percent.

1.2 Foreign exchange market. The environment on the domestic market of foreign currency formed in January-November 2009 was formed under the influence of external trade and payment flows and was marked by the following indicators (table 1.2).

Table 1.2
Data on foreign exchange market transactions
mln. US dollars

Currency market sectors
January-November, 2009

growth pace to the correspondent period of 2008, percent

January-November, 2009

growth pace to the correspondent period of 2008, percent

Domestic economic entities
11 543.0
14 874.1
Non-resident companies
65 618.5
64 925.1
5 535.9
6 277.5
83 530.9
86 848.5

The largest demand for foreign currency was noted in January 2009, which was mainly due to seasonal factors, inflation and devaluation expectations. As far as the expectations stabilized and the currency market participants adapted to the new exchange rate forming regime, and also due to retaining high interest rates for deposits denominated in native currency and active economic measures taken, monthly average demand of population for foreign currency considerably decreased and made 15.4 mln. USD in February-November, 2009. Taking the above into account, net sales of foreign currency made by population amounted to 39.7 mln. USD as early as November.  

1.3. Exchange rate policy. The exchange rate policy was first of all aimed to support the country’s financial stability and maintain Belarusian export competitiveness. The above encouraged general economic stabilisation as well as was one of offsetting factors amid a decreased demand for local products – by means of the increase in foreign trade transaction price effectiveness for Belarusian exporters. Thus, in November 2009 as compared to December 2008, the index of factual effective Belarusian rouble exchange rate dropped 19 percent, including the index of factual effective Belarusian rouble exchange rate in relation to the Russian rouble fell 17.1 percent which testifies to a positive effect on price conditions of foreign trade transactions for exporters. 

January-November 2009 saw the Belarusian rouble stability was maintained within the frameworks of the established corridor ± 10 percent to foreign currency basket. On the whole, the cost of currency basket grew by 6.7 percent to 1 024.01 BYR. The Belarusian rouble weakened against the US dollar at the rate of 5 percent to 2 782 BYR for one US dollar, 11.7 percent against Euro to 4 136.83 BYR for one Euro, and strengthened against the Russian rouble at the rate of 3.5 percent to 93.30 BYR for one RUB.

2. Monetary overview

2.1 Monetary aggregates. The January-November 2009 monetary aggregates were being formed first of all under the influence of the emerged macroeconomic conditions (see Table 2.1.).

Table 2.1
Change of broad money supply and its components, mlrd. BYR 


Increase from the beginning of the year

in roubles
in percent ratio

Cash in circulation (М0)

3 836.2
3 601.4

transferable rouble deposits

6 882.2
5 921.4
of natural persons
1 952.0
2 050.4
of legal entities
4 930.2
3 871.1
-1 059.1

Active rouble money supply (М1)

10 718.5
9 522.9
-1 195.6

Time rouble deposits

9 117.9
8 789.4
of natural persons
5 779.3
5 786.3
of legal entities
3 338.5
3 003.2

Securities issued by bank (beyond bank circulation) denominated in native currency

1 056.1

Rouble money supply (М2*)

20 541.7
19 368.4
-1 173.3

Foreign currency deposits, mln. USD

4 638.3
5 601.5
of natural persons
2 514.0
+1 020.5
of legal entities
2 124.3

Broad money supply (М3)

30 961.1
36 023.8
+5 062.7

2.1.1. From the beginning of the year 2009, rouble money supply (money aggregate M2*) dropped 5.7 percent (1.17 trillion roubles) to 19.37 trillion roubles as of December 1 (see Figure 2.1). A decrease in rouble supply occurred mainly in the beginning of the year 2009 which was due to a seasonal factor, the decline in sales products and services on foreign and domestic markets, finished product stock dynamics and balance of foreign trade. March-November, 2009 saw rouble money supply grow 19.1 percent (3.11 trillion roubles).

Fig 2.1. Money supply M2* growth (to the level of the previous year)

Alongside with that, an average annual pace of monetary aggregate M2* shrinkage for the period from December 1, 2008 to December 1, 2009 grew 7.8 percent to a 7.6 turnover.

Active rouble money supply (monetary aggregate M2*) dropped 11.2 percent or 1.2 trln. BYR (see Fig. 2.2) for January-November, 2009. Cash in circulation included in the money supply dropped 6.1 percent (by 0.23 trln. BYR); at the same time transferable deposits grew five percent (by 98.4 mlrd. BYR). The January-November, 2009 dynamics of cash in circulation and the transferable deposits of natural persons was mainly influenced by an increase in net demand of the population for foreign currency at the beginning of the year as well as a slowdown of the population income growth.  It is worth mentioning that April-November saw the growth of the above active rouble money supply components. Thus, the growth of cash in circulation for April-November, 2009 made 16.4 percent, with natural persons’ transferable deposits grew 33.3 percent which is a testimony to the decrease in population demand for foreign currency and occurrence of financial stability on the whole. 

Natural persons’ time deposits grew 0.1 percent (by 0.07 trln. BYR) in total for the period of January-November, 2009. Their dynamics could be characterised by the January-February drop which was due to a partial crossflow of rouble deposits to foreign exchange deposits and the March-November growth thereof. For the period of March-November, time rouble deposits of natural persons grew 21 percent or increased by 1.01 trln. BYR. This was mainly due to interest rate policy being led which was directed to increase savings on deposits denominated in Belarusian roubles. 

Fig. 2 Money supply M1 growth
(to the level of the previous year)


2.1.2 Broad money supply as of December 1, 2009 amounted to 36.02 trln. BYR and gained 16.4 percent (5.06 trln. BYR) for the period of January-November, 2009. An annual average velocity of broad money supply circulation from December 1, 2008 till December 1, 2009 dropped 13.8 percent (to a 4.1 turnover).

Foreign currency deposits in dollar equivalent grew 20.8 percent or 963.2 mln. USD. Their major increase occurred due to natural persons’ deposits which gained 40.6 percent or 1 020.5 mln. USD for the period of January-November.

However, it is worth mentioning that the growth of natural persons’ foreign currency deposits slowed down. If the January, 2009 growth made 11.6 percent or 290.8 mln. USD, then February’s and March’s indicators made 6.5 and 4 pp respectively or 181.7 and 120.2 mln. USD. November saw the deposits growth slow down to 1.1 percent. Overall shrinkage of growth pace was first of all connected with the fact that rouble deposits became more attractive and their number increased. Legal persons’ foreign currency deposits fell 2.7 percent (by 57.3 mln. USD). On the whole, the major share in foreign currency deposits (71.9 pp) was accounted for time deposits which grew 30.3 percent (by 938 mln. USD).

2.1.3. Rouble monetary base affected by the National bank and the Government transactions which were determined by the situation of the foreign exchange market and the banking sector fell 2.5 percent (by 0.18 trln. roubles) for the period of January-November, 2009 and made 7.08 trln. BYR as of December 1, 2009.

2.2. The balance factors of money supply change. The basic domestic factors to change the broad money supply in January-November, 2009 were the increase of net foreign assets of banking system (NFABS) and net domestic assets of banking system (NDABS) (see Table 2.2).

Table 2.2
Belarus’ banking system balance
mlrd. BYR


Increase at the beginning of the year


in percentage points

1. Net foreign assets of banking system

3 098.9
4 211.1
+1 112.2
mln. USD
1 408.6
1 513.7

1.1. Net foreign assets of monetary authorities, mln. USD

3 201.6
3 821.8
1.2. Net foreign assets of banks, mln. USD
-1 793.0
-2 308.1
2. Net domestic assets of banking system
27 865.2
31 815.3
+3 950.1
2.1 Net domestic requirements
39 156.9
45 847.6
+6 690.7

2.1.1. Net requirements to the bodies of state administration

-9 791.0
-19 705.1
-9 914.1
2.1.2. Requirements to other sectors*
48 947.9
65 552.7
+16 604.9
2.2. Other net positions
-11 291.7
-14 032.3
-2 740.6
3. Liabilities, not included in broad money supply

Broad money supply (1+2-3)

30 961.1
36 023.8
+5 062.7

The main sources of the January-November, 2009 broad money supply change appeared to be:
- an increase in NFABS by 105.1 mln. USD (by 7.5 percent) as a result of a drop of net foreign assets of banks and an increase in net foreign assets of monetary authorities;
- a 14.2 percent NDABS growth due to a 34.5 percent rise of banking requirements to other sectors with pure credit money reduction granted to Bodies of State Administration which was mainly due to the government deposits growth with the National Bank and other banks with the reduction of other net positions.

International reserve assets of the Republic of Belarus as of 2009:
in a national definition made 4 928.7 mln. USD having increased from the beginning of the year 2009 by 34.6 percent (by 1 266.5 mln. USD);
in the SDDS IMF definition made 4 591.8 mln. USD having increased from the beginning of the year 2009 by 50.1 percent (by 1 530.7 mln. USD).

3. Interest rates

3.1. Refinancing rate, liquidity regulation instruments and inter-bank lending rate.
Amid conditions of unfavourable external-economic situation, interest rate policy was directed to maintain actual rates at a positive level encouraging stability of the finance system, balance of payments and economic situation on the whole.

With the view to lessen inflation and devaluation pressure, retain BYR exchange rate stability and further encouragement of the population and organisations to make deposits in banks, refinancing rate of the National Bank was increased by two percentage points to 14 percent per annum from January 8, 2009.

From December 1 of the current year taking into account retardation of inflation processes stared from February 2009 and with a view to increase credit accessibility for economic entities (preserving an opportunity to keep bank deposits attractive), the National Bank reduced refinancing rate by 0.5 percentage points to 13.5  percent per annum.

In order to provide stability, the National Bank increased the rates forming upper and lower limits of the interest rates corridor in early January, 2009 (overnight credit and SWAP overnight – to 22 percentage points, deposits – to 10 percent per annum). February-March, 2009 saw the above rates stable.

In order to optimize the interest rates on the monetary market due to lower inflation in April, the rates on the overnight credit and SWAP overnight transactions of the National Bank were decreased by two percentage points to 20 percent per annum, deposit rates dropped to 8 percent per annum. May of the year 2009 saw the above rates stable. Because of the need to enhance the situation of the monetary and currency markets, the interest rates on the overnight credit and SWAP transaction were upped by two percentage points to 22 percent per annum, on deposits – to 10 percent per annum. July-November saw the interest rates on permanently available liquidity control transactions stable. With monetary markets stable and inflation down, the National Banks transactions interest rates dropped 0.5 percentage points since December 1, 2009.     


Fig. 3.1. Dynamics of rates on liquidity control instruments and interbank offered rates

On the whole, bank liquidity was being maintained by means of auction-based operations. The share (amount outstanding) of the auction operations in the total pattern of liquidity maintenance operations for the above period made 57.4 percent.

Taking into account the situation with the bank sector liquidity and the level of the NB rates on auction operations on the open market, the November 2009 interest rate on one-day rouble interbank market was at the level of 19.8 percent per annum (see Fig. 3.1.) (the October rate was at the level of 21.2 percent per annum) which encouraged banks to increase own resources effectiveness as well as attract monetary means of the population, Belarusian and non-Belarusian undertakings.

Fig. 3.2. Dynamics of rates on new rouble time deposits

3.2 Deposit market rates. The new time deposits’ rate in national currency in November, 2009 was 18.4 percent per annum which is an increase by 1.7 % as compared to January. At the same time, the rates on new rouble time deposits grew from 19.4 percent per annum in January, 2009 to 20.6 percent per annum in November, 2009. In real terms (considering price fluctuation), the rate on new rouble time deposits made 8.7 percent per annum in January-November, 2009 (see Fig. 3.2).

The growth of rates on new rouble time deposits is primarily connected with the need to create attractive conditions for savings which encourage an inflow of monetary means of organisations and the population to the banking sector that in turn sustain banks’ resource base for the financial support of the real sector of the economy.

Alongside with an increase in interest rates denominated in BYR in order to increase rouble deposit attractiveness, measures were taken to reduce interest rates denominated in foreign currency. November, 2009 saw the rates on new rouble time deposits amount to 7.6 percent per annum against 10.7 percent per annum in January, 2009. The above decrease was mainly due to the reduction of population deposits ratesfrom 11.8 percent in January, 2009 to 8.1 percent per annum in November, 2009.  

  Figure 3.3. Dynamics of rates on newly issued rouble loans

3.3. Credit market rates.
The average bank loans’ interest rate in national currency   in November 2009 was 21.5 percent per annum which is an increase by 1.9 percent as compared to January 2009 (see Fig. 3.3). The rate on new rouble loans issued to legal entities in November, 2009 made 21.8 percent per annum.

The rate on newly issued loans denominated in freely convertible currency dropped 1.9 percentage points to 12.6 percent per annum in November, 2009 as compared to January, 2009.

On the whole, the level of rates on the monetary market was formed under the influence of external and internal conditions as well as the need to solve the problems of finance, currency and general economic stability.

 4. Equity market

In January – November 2009 there were not placed public bonds in Belarusian roubles (government short-term bonds and government long-term bonds) which was connected with a state of liquidity of market participants. At the same time, a 1 285.59 mlrd. BYR redemption was paid for government short-term bonds and government long-term bonds. As a result, December 1, 2009 comparing with January 1, 2009 saw total government short-term bonds and government long-term bonds in circulation decrease by 1 299.16 mlrd. BYR or 23.3 percent to 4 278.67 mlrd. BYR at face value. In the year 2009, government securities denominated in foreign currency were not placed either.

As of December 1, 2009 28 banks and 15 non-banking equity market participants were allowed to enter equity derivatives market.
Total volume of biddings on the equity derivatives market held by Joint-Stock Company “Belarusian Currency and Stock Exchange” in January-November, 2009 made 32.16 trln. BYR. This is more than twice as much as the level of January-November, 2008 and was primarily connected with the growth of government securities upon REPO for bank liquidity control.

5.    Banking system

5.1.    General characteristics.
In January-November of 2009 banking sector trends tended to maintain.  

As of December 1, 2009 the banking sector included 32 operating banks with 275 banking subsidiaries of which 25 banks had foreign assets, including 9 banks – having had a 100 percent share of foreign capital and two more banks that both had just one share belonging to Belarusian entities. The representations of banks from Russia, Ukraine, Lithuania, Latvia, Germany and Interstate Bank are located in Belarus.

Amid financial and economic conditions formed as a result of aggravation of the situation on foreign markets, banks were maintaining the volume of assets which were enough not only to cover all own risks, but to sustain the banking sector attractiveness.

Figure 5.1 Dynamics of some features of banking sector

The trend of normative capital of banks was preserved. For the period of January-November of the year 2009 the volume of the normative capital of banks grew 13.4 percent or 1 512.2 mlrd. BYR and made 12 826.3 mlrd. BYR as of December 1, 2009. Banks’ authorised fund made 9 148.4 mlrd. BYR as of December 1, 2009 and grew 5.4 percent (by 469.8 mlrd. BYR) for January-November. As of December 1, 2009 the ratio of authorised fund to the GDP grew to 6.4 percent year on year (see Fig 5.1).

5.2.    Resource base of banks. In January-November of the year 2009 bank resource base proceeded to increase. 
As of December 1, 2009 its volume made 79 348.3 mlrd. BYR having increased by 25.2 percent or 15 968.5 mlrd. BYR for January-November, 2009. As of December 1, 2009, the ratio of the resource base to the GDP made 52.9 percent and grew 13.5 pp from early 2009.

Factors influencing the resource base growth in January-November of 2009 were monetary means of natural persons, non-Belarusian entities, bank and the National Bank, other sources (see Table 5.1).

Table 5.1

Dynamics of banks’ resource base formation sources                             
mlrd. BYR.


Increase form the beginning of the year

in BYR
as %
Natural persons
13 274.9
17 707.4
+4 432.5
Belarusian economic entities
13 148.4
12 785.8
National government and local authorities
12 125.5
11 466.4
non-Belarusian entities
6 765.4
9 790.1
+3 024.7
Banks and National Bank
5 338.9
11 796.9
+6 458.0
Other sources
12 726.6
15 801.7
+3 075.1








As of December 1, 2009 the main sources to form the resource base of banks were still monetary means of natural persons, Belarusian economic entities and other sources (see Fig. 5.2).

Figure 5.2. Structure of banks’ resource base formation sources

5.3.    Active banking operations

The main trend of bank assets distribution are loans issued to Belarusian economic entities (see Fig. 5.3). As of December 1, 2009 the share of banking requirements  to the economic entities made 60.1 percent of the assets structure.   (see Fig. 5.3).

Figure 5.3. Active banking operations

In January-November of the year 2009, the banking sector retained a fast pace of economy crediting. For January-November, 2009, banking requirements to other sectors of the economy grew 34.5 percent or 16.2 trln. BYR and made 63.4 trln. BYR as of December 1, 2009 (for January-November, 2008 – 48.9 percent, 14.9 trln. BYR and 45.4 trln. BYR respectively). At the same time the pace of the crediting was significantly outstripping the GDP growth. Thus, the growth of banking requirements denominated in national and foreign currencies to other sectors in real terms on average for January-November, 2009 y/y made 44.2 percent  (in BYR – 52.7 percent) with a drop of the real GDP by 0.4 percent.

5.4. Redistribution of assets among sectors
Comparing the data on assets attraction to the banking sector and the distribution of funds in the economy one can note that banks carried out net lending of the real economy sector by means of the attraction of funds of population, non-Belarusian entities and other resource forming sources (see Fig. 5.4).

Figure 5.4 Redistribution of funds among economy sectors as of December 1, 2009

* Resource sources include banking capital, currency revaluation account, interbank and interbranch accounts, other funds.

6.    Payment system

With a help of a computer aided interbank payment system (hereinafter CAD IPS) 51 mln. of payments to the amount of1 1055.7 trln. BYR were settled in January-November, 2009. The number of the payments dropped 2.8 percent but their amount grew 67.6 percent (by 425.4 trln. BYR) in January-November, 2009 as compared to January-November, 2008. This shows the tendency of the payment system functioning to optimise.
There were no past due (void) payments during the accounting period. That testifies to a high level of current liquidity control by the banking system.

The following goals were achieved by the National Bank in order to provide for effective, reliable and safe functioning of the banking system:
-programme and technical complex of the CAD IPS conforms to the requirements of regulating documents and standards of the Republic of Belarus to provide for a technical ability to settle interbank payments;
- client accessibility to the CAD IPS (on an accrual basis from the beginning of the year) as of December 1, 2009 made 99.97 percent of  daily working time fund (while the stipulated value is not less 95 percent according to the Principles of  Monetary Policy of the Republic of Belarus for 2009).

On the whole, January-November of 2009 saw the trends in the country’s monetary field formed with respect to external and internal macroeconomic conditions.

The Department of Monetary Analysis and Forecasting
of the Central Administrative Board of Monetary Policy
and Economic Analysis of the National Bank of the Republic of Belarus 






Ministry of Foreign Affairs of the Republic of Belarus