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7.1 FX issues
Since 1 October 2017 the amount of a company’s income in foreign currency subject to mandatory sale has been reduced from 20% to 10%. This regulatory measure dates back to 1996 and the rate of mandatory foreign currency conversion has ranged from 10% to 60%. According to the Main Directions of Monetary Policy adopted by the Belarusian Government, mandatory sale of foreign currency will be totally abolished in 2018.
Additionally, during the last days of 2017, the National Bank abolished target purchase of foreign currency and approved a new version of the Instruction on currency exchange transactions. Starting from 11 April 2018, companies will be no longer be obliged to strictly adhere to the purpose for which foreign currency is purchased.
8.0 Financial & capital markets 8.1 Bank sector overview
The financial sector remains a contingency liability to the government
and a potential risk for macroeconomic stability, despite some improvements. Regulatory NPLs (the three riskiest categories) have stabilised, reaching 12.8% of gross credit exposure in 3Q17 due to the improved macroeconomic backdrop leading to lower interest rates and lower exchange rate volatility.
Capitalisation levels have improved somewhat, but remain modest given high credit risks. The large presence of the public sector (65% of assets) creates fiscal risks for the sovereign due to the potential need of further capital injections, execution of guarantees and issuance of securities in exchange of loan transfers.
EBRD plans to buy stake in Belinvestbank in 2018 The European Bank for Reconstruction and Development (EBRD) plans to acquire a stake in the leading state-owned Belinvestbank before the end of this year, EBRD Vice President Alain Pilloux told the media after meeting Belarusian President Alexander Lukashenko on 7 June, BelTA reports . “We have been cooperating for some time with the National Bank and the Government of Belarus in order to improve Belinvestbank operations. We have approached the moment when the EBRD is considering acquiring a stake in Belinvestbank. We hope this will happen before the end of the ongoing year,” Pilloux said. “After this, we, together with the country's government and the National Bank, will be doing our best to continue the development of Belinvestbank. We will focus on increasing the range of its operations in order to find a strategic investor whom we are going to discuss with the Belarusian government,” he said. The privatisation of Belinvestbank has been on the docket for decades but attracted little interest from investors. With a focus on investment the bank is one of the Republic’s better banks, but the lack of a function market economy has stymied its business.
The National Bank of Belarus (NBB) has given the go ahead for a
23 BELARUS Country Report July 2018 www.intellinews.com