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Belarusian Gold, Forex Reserves at Record High

After Belarus’ reserves were depleted last year owing to a severe financial crisis, it has achieved the set 2012 target of US$7 billion in forex and gold reserves in the very first week, the National Bank of Belarus said in a statement earlier this month.

As local information agency BelTA reports, the increase in the gold and foreign exchange reserves was facilitated by the second tranche of the EurAsEC Anticrisis Fund loan to the tune of US$440 million and the transfer of part of the syndicated loan provided to OAO Belaruskali by Sberbank of Russia and the Eurasian Development Bank.

Belarusian gold and foreign exchange reserves rose over the New Year to US$7.9 billion due in part to the US$2.5 billion paid by Russia’s Gazprom for control of pipeline operator Beltransgaz, Reuters reports.

The conditions of a Russia-led rescue loan stipulated that Belarus must sell state-owned assets in order to free up cash. Gas monopoly Gazprom said in November it would buy the 50 percent of Beltransgaz it did not already own for US$2.5 billion.

The country’s central bank National Bank of Belarus (NBB) said reserves had grown as a result of the sale to US$7.915 billion from US$7.355 billion in early December.

Last year, the severe financial crisis devalued the Belarusian ruble and sent inflation spiraling by more than 100 percent.

The monetary policy guidelines are aimed at limiting inflation, while the Belarusian ruble’s exchange rate is to be set by market forces with minimal intervention from the NBB.

The NBB promised that it would carry out only limited interventions for curbing drastic fluctuations of the ruble’s exchange rate.

Earlier, the NBB said gold and foreign exchange reserves are expected to total US$6.1 billion to US$7 billion at the end of 2012.

“Keeping the reserves at a level sufficient for the economic security of Belarus and ensuring timely settlement of foreign and domestic obligations in foreign currency in full are priority tasks of the government and the National Bank,” central bank official said to BelTA.

The NBB said that its base refinance rate would be reduced to 20-23 percent towards the end of 2012.

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