The foreign exchange reserves of Belarus increased by $273mn or 3.9% month-on-month to $7.267bn in September, following a 4.9 m/m growth in August and a 25.2% m/m jump in June, the National Bank of Belarus (NBB) said in a statement on October 6.
The result was attributed to September's disbursement of a $700mn loan by the Russian government, as well as revenues from the collection of export duties on oil products. The placement of forex-denominated bonds by the NBB, as well as an increase in the price of monetary gold, also added to the result.
On October 6, S&P Global Ratings said in a note that NBB has FX obligations to domestic banks of about $2bn and a government FX deposit of around $4bn, underpinned by a recent bond issuance. The government will draw on its deposits with NBB to meet the Eurobond $800mn payment in January.
"Beyond that, we believe the government may not be able to deploy its resources at the NBRB in full, given the necessity to maintain a balance of payments buffer," the agency added. "We also note that in addition to the obligations highlighted above, NBB has external debt of around $1.4bn booked on its balance sheet."
Fitch underlined that continued support from Russia remains central to Belarus' ability to service its commercial debt.
"By support we primarily mean favourable trade conditions, such as continued supply of hydrocarbons at attractive prices, and the willingness to refinance existing debt," the agency's note reads. "We note that as of end-2016 Russia accounted for around 50% of Belarus' total public sector external debt. We currently expect bilateral relations to remain stable over the medium term, although downside risks exist."