Belarus redenominates its domestic currency

By bne IntelliNews July 1, 2016

Belarus redenominates its domestic currency, the Belarusian ruble, from July 1, with the replacement of banknotes designed in 2000 by banknotes and coins designed in 2009, under the ratio BYR10,000 to BYR1.

Seven new banknotes - 5, 10, 20, 50, 100, 200, and 500 rubles - and eight denominations of coin - 1, 2, 5, 10, 20, and 50 kopeks, and 1 and 2 rubles - will be put into circulation beginning on July 1. Until December 31, banknotes of the 2000 series and banknotes and coins of the 2009 series will be in parallel circulation and subject to obligatory acceptance without restriction in all kinds of payments performed by all economic entities. 

The Belarusian authorities see favourable macroeconomic conditions for conducting the redenomination as inflation in Belarus reached 12% y/y last year, and the government intends to secure one-digit inflation figures in 2017 and reduce inflation to 5% in 2020.

On June 16, President Alexander Lukashenko called for a "well-organised" process of  redenomination. According to his media office, Lukashenko said the move could be considered "an unpopular event to a certain extent [that] will take place in the run-up to the parliamentary elections [in late 2016]".

"It means that we are not afraid of anybody. We are statesmen, not just politicians," Lukashenko added. "And statesmen always think about the prospects and development of the state."

According to the National Bank of Belarus (NBB), from January 1, 2017, through December 31, 2021, currency units of the 2000 series will be exchanged for those of the 2009 series in any sum without restriction and charging commission.

Meanwhile, the old currency units may be exchanged for the new ones from January 1, 2017 through December 31, 2019, at the NBB, banks and non-bank financial institutions; from January 1, 2020 through December 31, 2021, at the NBB; and beginning from January 1, 2022, the currency units of the 2000 series will be deemed invalid.

The Belarusian authorities printed new banknotes in early 2008, however the redenomination was postponed due to the global economic crisis and the deteriorating economic situation in Belarus.

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