Belarus to redenominate its domestic currency in 2016

By bne IntelliNews November 5, 2015

Belarus will redenominate its domestic currency, the Belarusian ruble, on July 1, 2016; all banknotes designed in 2000 will be replaced by brand-new banknotes and coins in the ratio BYR10,000/BYR1.

The redenomination seems to be a technical move of the government (as the exchange rate against the US dollar is currently BYR17,413), which was refused in 2014 due to the fact that redenomination is advisable only if the inflation level in the country stays steadily below 10%. The Belarusian government forecasts 12% y/y inflation in 2016.

According to a special decree signed by President Alexander Lukashenko on November 4, BYR1 of new banknotes (designed in 2009) will be equal to 100 Belarusian coins of the 2009 design, Lukashenko's media office said in a statement.

From July 1, 2016 to December 31, 2016, both designs will be used simultaneously.

"Banknotes designed in 2000 can be replaced by banknotes designed in 2009 without restrictions and additional fees in the period from January 1, 2017 to December 31, 2019 at the National Bank, banks and non-bank credit and financial institutions of Belarus. In the period from January 1, 2020 to December 1, 2021 they can be replaced at the National Bank," the statement reads.

According to the presidential decree, manufacturers, traders, suppliers, executives and their representatives will have to provide information about the prices and tariffs on their goods (works, services) calculated both in the new and old design Belarusian rubles within the second part of the next year.

The National Bank of Belarus said on November 4 that preparations for redenominating the domestic currency started many years ago. 

"The new banknotes were printed at the National Bank's request as far back as 2008, when one US dollar bought slightly more than 2,000 rubels. However, the rubel's redenomination was postponed because of the deterioration of the economic situation. The printed notes were handed over to the National Bank for storage," the statement reads. 

Meanwhile, former Belarusian prime minister Mikhail Chigir described the planned redenomination of the Belarusian rubel is nothing but "a waste of money".

"It is rightly said that this is a purely technical operation. And the only thing that may happen is that we will fail to curb inflation and prevent the further depreciation of the Belarusian currency, that we’ll be minting new coins and printing money. Other than that nothing will happen," Chigir said in an interview with the Radio Free Europe/Radio Liberty on November 5.

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