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The National Bank of the Republic of Belarus (NBRB) is closing the over-the-counter currency market at least until 2017, according to an announcement by the regulator cited by Interfax.
The OTC Forex market will be closed in Belarus, with the single body to be allowed to trade in it over the following two years being the central bank of Belarus itself. At the same time, the exchange trading of currencies will remain unrestricted.
The measures come as the national currency – Belarusian Ruble (BYR), has been under pressure, while the country cannot cope with the demand for western currencies like US dollar and Euro. Only a couple of days ago the Central Bank introduced draconian measures regarding buying of foreign currency – the commission for such transactions is now 30%.
Mikhail Myasnikovich, the Belarusian Prime Minister, said the measures were implemented in an attempt to halt the speculation on the Forex market. He threatened hefty punishments on those who dare to violate the new restrictions, including criminal charges.
Banks in the country are registering massive drop in deposits denominated in BYR, whilst investors are getting eager to open new deposits – in foreign currencies, or to simply withdraw their money from the bank. The strict measures, however, appear to be bearing fruit, with the outflow of BYR-denominated deposits slowly losing pace: on December 18th, individual depositors withdraw BYR deposits worth BYR 2 trillion, while on December 19th the amount fell to BYR 900 billion.
The rigid measures are implemented at a moment when Belarus’s neighbor and economic partner Russia is also experiencing difficulties with its national currency. Russia’s president Vladimir Putin was adamant, however, that there will be no sanctions against currency speculators and that no one will be forced to sell their foreign currency. Russia’s markets have witnessed some appreciation of the RUB today, with the Russian currency reaching levels against the US Dollar it has not reached since December 11, 2014, several days before the steep key interest rate hike to 17%.