New US sanctions will deprive Belarus’s ability to attract dollars in the domestic market, as the American correspondent banks will stop serving these transactions, told in conversation with RBC former senior adviser to the sanctivation division of the US Ministry of Finance.
The Ministry of Finance US introduced the fifth package of sanctions against Belarus. The country will remain without dollars due to public debt restrictions. According to the Directive, American citizens and organizations are prohibited “all transactions with a new duty for more than 90 days issued on December 2, 2021 or after, including the provision of financing and other operations.”
New measures can apply a tangible blow to a strongly dollarized Belarusian economy, since the country’s Ministry of Finance issues even internal debt in foreign currencies – about 60 percent of bonds is nominated in dollars. Development Bank, crediting national projects, has dollar bonds for another 115 million.
Presidential elections and associated mass protests of 2020 closed Belarus Western debt markets, and in the domestic market, buyers are mainly residents of the country. Nevertheless, the placement of bonds, their repayment and payment of income on them is carried out in the currency of the nominal, that is, most often in dollars. Any electronic dollar payment in the world passes through the American Correspondent Bank. “Given that the Americans are prohibiting any operations with the new duty of the Belarusian Ministry of Finance, I think that clearing of debt transactions will also be banned,” said O’Tool.
In the summer of 2021, the Belarusian bank “Absolutbank” lost opportunities to serve Visa cards and use the Western Union system due to American sanctions. In the organization, cash transfers were stopped in foreign currency, except for Russian rubles and transfers to accounts in resident banks.