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Aggregate amount of banks’ problem loans reported up 50 percent in first four months

The aggregate amount of Belarusian-based banks’ problem loans increased by 50 percent in the first four months to 1.4 trillion rubels, Henadz Barzdow, a departmental head at the National Bank of Belarus (NBB), said at the Sixth Bond Congress of CIS and Baltic Countries, which was held in Minsk on June 18.

Somewhat alarmingly, the share of such loans rose to 2.4 percent, whereas it should not exceed five percent under the government’s 2009 Monetary Policy Guidelines, Mr. Barzdow said.

The priority at present is to minimize the impact of adverse external factors on the country's banking sector and the economy as a whole, he said. The NBB's policy of keeping the rubel's exchange rate against a basket of currencies within the projected fluctuation range of five percent will help preserve favorable conditions for foreign trade, allay fears of the national currency's drastic depreciation and thus reduce demand for foreign cash, Mr. Barzdow said. Another important goal is to make rubel deposits more attractive than foreign currency deposits, Mr. Barzdow said. To achieve the goal, interest rates on rubel deposits will be kept high enough to counter the effects of inflation, while interest rates on foreign currency deposits will be lowered, he said.

Mr. Darzdow described the general situation of Belarus' banking sector as stable and its main performance indicators as being within safe limits.

As of May 1, Belarus' banking sector comprised 31 banks and 312 subsidiaries. The aggregate amount of their authorized capital totaled about $3 billion, with foreign investments accounting for more than 17 percent of it. //BelaPAN