Belarus may have to restructure its debts this year and can lean on Russia for financial assistance if it needs to, Belarus President Aleksandr Lukashenko told a press conference in Minsk on January 29, triggering a sell-off of Belarus debt.

"This year we have to make $4bn payments on our foreign debt in principal and interest. In 2016, around $1.5bn, which will be easier. But if there are difficulties, we will hold talks on restructuring," Lukashenko said.

A few hours later he corrected his statement that Belarus would hold talks on sovereign debt "restructuring," saying that he meant talks on "refinancing," or rolling over debt. He made the error in the first half-hour of an over seven-hour press conference, clarifying the statement two hours later during the same press conference.

But the damage had been done already, after Bloomberg seized on the original "restructuring" comment, crashing the market in Belarus bonds, which saw its biggest ever sell-off. The government’s dollar-denominated bond due in August plunged 22 cents on the dollar to 75 cents. Dollar-denominated notes due in 2018 dropped 21 cents to 70 cents on the dollar.

Belarus' $1bn eurobond due in August 2015 remained 12.4 cents down on the dollar, bring yields to 47.53%, three times higher than on closing January 28. 

Belarus' external sovereign debt stood at $12.8bn as of December 31, 2014, more than twice its hard currency reserves of about $5bn as of the end of January, according to the Belarusian Finance Ministry, which is less than two months of import cover. 

Lukashenko said that Belarus should receive another tranche of a stabilisation credit from the Eurasian Economic Union, and that Belarus has “solid agreements” in place with Russian President Vladimir Putin to receive up to $500mn in loans “if the situation gets very difficult", Lukashenko told  journalists. He said that Putin had told him "if the worst comes to the worst, we will prop you up".

Belarus received a $3.5bn bailout from the IMF in 2009 during the global financial crisis. In 2011, Russia lent its Western neighbout $3bn to cope with a balance-of-payments crisis, with Belarus also transferring ownership of its gas-pipeline network to Gazprom. 

Lukashenko blamed the country's financial problems - leading to devaluation at the end of 2014 - on the crisis affecting its neighbours, Russia and Ukraine, whose currencies devalued by up to 50% in 2014.

“This situation was driven by external factors since we have an export-oriented and absolutely open economy. Our main partners are Russia and Ukraine,” Lukashenko said, adding that Kazakhstan had also devalued the tenge at the end of 2014.  "Given these countries account for nearly a half of our foreign trade, our exports, of course these events could not but affect the situation in Belarus. The psychological factor also plays a big role in this so-called market economy,” Lukashenko said.

“Taking into account that our country is open, such events had an influence on us. We tried to react promptly, took the measures you know about and tried to ensure stability on the financial market of the country. It seems that we were a success. Let's see what the situation will be in the future," Lukashenko said, striking a note of optimism.

Lukashenko acknowledged that Belarus is dependent on Russian financial support and committed fully to the future of the Eurasian Economic Union - comprising Belarus, Kazakhstan and Russia - which was launched on January 1, 2014. “We must use every opportunity this integration project opens for us,” Lukashenko said, adding that "Belarus will do everything possible to strengthen the integration, develop the union of equals free from any exemptions and restrictions". 

However, in a reminder that Belarus, as one of Russia's few remaining allies, also has significant leverage over the Kremlin, he said that Belarus could leave the Eurasian Economic Union if Russia fails to deliver on promises on free trade, citing recent disputes over imports to Russia from Belarus of meats and sweets. He also emphasised that Belarus was not part of any "Russian world," but remained "an independent nation".