Chief Banker: Preparing for re-denomination

The National Bank of Belarus plans to launch preparations next year to re-denominate the Belarusian ruble, cutting zeroes off the much devalued currency, National Bank head Nadezhda Yermakova said on Thursday. “Considering growth of the economy and household income, we may start preparations for the re-denomination in 2013,” Yermakova told the national parliament. The chief banker said the country’s monetary authorities would carry out all necessary preparations for a re-denomination only in 2013 but declined to specify a firm date for the move. “As for a possible timeframe for re-denomination, we may consider a ten-year period,” she said. Re-denomination cannot possibly happen next year, as it is inexpedient to re-denominate the national currency in a period of high inflation, she said. “This year, our task is to limit inflation to 19-22 percent. All the zeroes can still be crammed into computers,” she said. In late March, Yermakova said the National Bank of Belarus considered it advisable to re-denominate the national currency if it continued to devalue, instead of printing larger-denomination banknotes. In spring, Belarus issued a 200,000-ruble ($25) banknote. Before that, the largest-denomination banknote in the ex-Soviet republic was worth 100,000 Belarusian rubles. The Belarusian ruble started to come under inflationary pressure in early 2011 due to a large trade deficit, and generous wage increases and loans granted by the government ahead of the December 2010 presidential elections, which returned President Alexander Lukashenko to a fourth term in office. The country’s deteriorating economic and financial performance has earlier prompted Belarus to seek financial aid from the IMF, Russia and the EurAsEC member states.