Belarus has managed to negotiate a new loan from Russia for 2019, the Belarusian state news agency BelTA reported, citing the country’s Finance Minister Maksim Yermolovich.
“Everything is in order, all the decisions have been made. The question now remaining is the drafting of the agreement. But that is already next year,” he said, adding that Minsk is not expecting any new decisions from Russia or from itself.
The loan in question will be for $630 million, Russian Finance Minister Anton Siluanov revealed in October. He explained that the funds will be used to repay loans issued to Belarus previously. Minsk asked for $1 billion, but Moscow only agreed to issue the amount needed by Belarus to repay its principal debt.
In two years, Russia will have paid itself roughly $1 billion for loans to Belarus. Between January and August 2018 alone, such operations amounted to $281.8 million.
The Belarusian government borrowed $613.9 million from the Russian Finance Ministry and from Russian banks, and returned nearly half of this amount as debt repayments.
In September 2017, Russia granted Belarus a ten-year government loan in Russian rubles, worth $700 million at the time. This was also intended to repay previous loans from Russia.
Belarus has a total government debt of $16 billion, of which 80% is loans denominated in foreign currency. At present, the Belarusian Central Bank has only $7 billion in reserves. In order to make the repayments, it will need to buy foreign currency on the market, driving down its national currency which is already struggling from a lack of export revenue.
In recent years, the Belarusian population has helped to mitigate the export deficit by selling roughly $2 billion per annum in the form of savings and earnings from work in CIS states. However, this support is now starting to decline, according to experts from the Higher School of Economics. Between January and July, the population sold only 920 million more dollars than it bought, equating to a 20% net drop in sales, and following a sharp drop in the Belarusian ruble.