Why did Belarus decide to abolish the currency trading restriction?
The reasons for Belarus to lift the existing currency trade restrictions are rather basic; according to the statement issued by the state’s financial authorities, the given strategy will allow for improving the current economic state of the country. Indeed, as Kazhamyakin explains, Luzhin, the NBB Deputy Chairman, claims the above-mentioned step to be a major foot forward in addressing the present-day economic issues, which the Belarus residents have been facing on a regular basis for a while: “the decision had been made for the purpose of restoring the country’s exchange market to normal operation and raising the transparency of how currency exchange rates are set” (Kazhamyakin para. 1).
As one can see quite clearly, the policy adopted by the Belarus government in terms of the currency trading restrictions pursues two key goals, i.e., the rejuvenation of the exchange market and the transparency of the financial transactions within the market in question In the light of the recent economic crisis, which occurred in the Belarus market, the idea of restoring the balance and allowing private entrepreneurs to evolve despite the recent financial issues seems quite legitimate. Indeed, surviving in the realm of global economy is not easy for the state that has suffered a major economic and financial challenge.
It is the saturation of the market with the required product, as well as the design of measures aimed at securing the Belarus currency, which are at the top of the state’s list of priorities at present. The shift from using the Belarus rubel to the introduction of a new currency into the market may serve as a major enhancement strategy for increasing the market significance and, thus, the cost of the former.
What is the effect of this change on the investment of multinational firms in Belarus?
Naturally, the above-mentioned shift from using the Belarus ruble to the incorporation of foreign currency into the key financial transactions within the exchange market are bound to trigger major alterations in the Belarus economic landscape. The promotion of small and medium entrepreneurships’ (SMEs’) development becomes possible with the integration of foreign currency into the exchange market; by incorporating a more adequate approach towards carrying out the key financial transactions and opening itself for communication with foreign companies, the Belarus SMEs will evolve, thus, leading to a major improvement in the state economy.
Moreover, the alterations in the exchange rate, which the above-mentioned changes will trigger, will set the premises for the stabilization of the current situation in the exchange market; specifically, the fact that the give change helped set the exchange rate that reflected the balance of supply and demand in the Belarus exchange market (Kazhamyakin para. 3) should be viewed as a major improvement in the Belarus economy and a huge step in the right direction.
It is also essential that the specified operation created the environment, which facilitated the location of the rubel’s marketing exchange rate (Kazhamyakin para. 4); as a result, the further provision of the “alternative BSCE trading sessions” (Kazhamyakin para. 5) can be considered a major innovation introduced into the Belarus economy. By opening new opportunities for its private entrepreneurs, Belarus will enhance its economic potential and be capable of entering the global market successfully.
It is quite remarkable that the aforementioned restrictions were imposed on the Belarusian exchange market for the same purpose of shielding it from a crisis (“Belarus Closes Currency Exchanges to Shield against Crisis” para. 2). However, a closer evaluation of the factors, which the exchange market was exposed to, has shown that the introduction of foreign currency will only help in the process of the state’s economic growth resurgence.
Works Cited
“Belarus Closes Currency Exchanges to Shield against Crisis” RT Network. 2014. Web.
Kazhamyakin, Andrey. “Exchange Rate Restrictions Lifted in Interbank Market.” Naviny. 2014. Web.