Belarus - Banking and securities

The National Bank of Belarus is the central bank of Belarus, charged with regulating the money supply, circulating currency, and regulating the commercial banks of the country. The currency unit is the ruble. There are no current figures on the level of foreign currency reserves, but it is widely assumed that these have dwindled to perilously low levels because of the need for the National Bank of Belarus to maintain the local currency at its overvalued exchange rate on the Minsk Interbank Currency Exchange (MICE). The central bank has also had to turn to the street market to replenish reserves; in August, 1996, it bought $25 million, paying effectively 10% more than it would have through MICE. Under Belarus's "currency corridor," the Belarussian ruble cannot fall below BR615,000: $1 at its twice-weekly auctions at the MICE. The street market accounts for 70% to 80% of foreign exchange trading. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $640.0 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $1.8 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 48%.