National Bank of Belarus makes it more difficult to issue foreign currency loans to non-exporting legal entities

July 2, Minsk / Anna Kot - BELTA/. The National Bank is amending the practice of banks applying the criterion of absence (insufficiency) of foreign currency receipts when classifying foreign currency debt. This is evidenced by a letter from the National Bank to commercial banks, according to a BELTA correspondent.
 
"Foreign currency debt can be classified as not having signs of negative information exclusively in the event that the debtor has foreign currency receipts sufficient for the timely and full fulfillment of obligations," the letter states.
 
The regulator warns that with the release of this letter, previously given recommendations that when assessing the sufficiency of foreign currency receipts, banks may consider the possibility of the debtor acquiring currency if they have sufficient receipts in Belarusian rubles, are no longer applicable.
 
Experts note that the changes made by the National Bank will significantly complicate the issuance of foreign currency loans to non-exporters, affecting the economic feasibility of such lending. In fact, foreign currency lending to legal entities that do not have foreign currency revenue will lead to an increase in allocations to reserve funds, which in turn will affect the increase in the cost of such loans.

This is not the first step by the National Bank towards tightening foreign currency lending to legal entities. Back in late 2012, by Resolution No. 577, the National Bank sharply tightened the conditions for providing loans in foreign currency to legal entities, the attractiveness of which significantly increased against the backdrop of high interest rates on ruble loans and a stable national currency exchange rate. It should be noted that the Anti-Crisis Fund of the Eurasian Economic Community and the International Monetary Fund have repeatedly recommended that the National Bank limit the volume of foreign currency lending in Belarus.-0-