Belarus: the denomination will reduce inflation?

In July 2016 there was a quite expected event in the economy of the Republic of Belarus - the denomination of the national currency. Of course, it was predicted, because samples of modern banknotes were printed back in 2009. But then the government postponed the reform. About how the denomination was held in Belarus in 2016 and whether it will solve all the current problems, let's talk in more detail.

Does reform mask inflation?

The main question that ordinary citizens in the Republic of Belarus ask: "Does the denomination conceal hyperinflation?" Why wait for people? Do I have to hurry to exchange points? Ordinary people, according to official authorities, have nothing to fear. No economic losses will be incurred by the population of the Republic of Belarus - the denomination assumes a temporary period of using banknotes. Both old and new will be in circulation until the end of 2016.

But the main problem of the country's economy is inflation. The past experience of denomination has shown that without simultaneous measures to reduce its level, no positive shifts in the population should be expected.

Inflation in the country, according to leading independent economists, is connected:

• With large budget expenditures.
• With concessional lending to unprofitable sectors of the economy.
• With the lack of measures to develop competition in the consumer market.

Hence the conclusion: you need to reduce costs, stop pouring money into unprofitable enterprises and expand competition. Together with the emission control, such reforms will reduce the level of inflation, which now amounts to about 15% in the Republic of Belarus. The denomination, according to economists, is effective at its level of 3-5%.

Features

The specifics of the reform are that the so-called "strange" denomination in the Republic of Belarus will cut four zero points from the bill at once. For the first time in a long time, coins will appear again, which until then were simply useless.

Denomination table in Belarus

Here is the order of transfer of old banknotes into new money.

Samples and the first batch of money were printed back in 2009, before the reform of the language in the republic. Therefore, a paradoxical situation happened: new banknotes are already out of date before official circulation on the market. But, despite this, in order to save, it was decided to leave them.

The period of double prices

The strangeness of the reform is not only in the fact that they cut down immediately four zeros, but also in the transition period. Some people remember the Soviet money reforms, when the time for an exchange was given a few days. As a result, many did not have time to replace old money with new ones. In Belarus, they decided to do so that the population absolutely did not feel the replacement of money. The exchange of money in the 2000 sample for new banknotes (the 2009 model) will be as follows: according to the plan, they are in parallel circulation until the end of 2016.

All sellers, producers of goods and services are obliged to indicate two prices up to this time: both in new and in the old course. No bonuses, commissions and benefits for the use of a particular currency do not work. For example, if in the store when paying a new bill promise to provide an additional discount, this action is illegal.

Those who do not have time to exchange money before the end of the year can by the end of 2019 do this in the credit and financial organizations and the National Bank, and from 2020 to 2021 - only in the National Bank.

Thus, according to official authorities, all conditions for ordinary citizens are provided, for which the very process of the denomination will not create additional problems. But is it really so?

Why rush?

Some economists are surprised by the timing of the reform. The denomination in Belarus in 2016 falls on July. That is, additional problems are created for enterprises that file tax returns. The double reporting creates confusion and at fiscal bodies. It would be better for the statistical and financial statements to hold a denomination from January 1. In addition, it would be optimal if the inflation rate slowed down for at least two consecutive years.

The era of solid millionaires is over?

Some analysts believe that such a reform will not affect the Belarusian economy in any way. This is rather a technical, rather than an economic operation, which has its psychological consequences. The era of the millionaires ended. Belarus is moving to a normal money account. But how long will it be with such inflation rates?

The National Bank of Belarus was against the reform. He argued this by saying that only with inflation below 10 percent is needed such reforms to cut off the zeros. Its projected percentage by the end of the year is 12 percent, but, most likely, it will be higher. The National Bank went to reform only under the pressure of the government, which indicates a serious intention to overcome inflation by the leadership.

Denomination of Belarus: new banknotes

The size of new bills does not differ from the previous ones - 150 by 74 mm. Similar and semantic content: architecture, national patterns. But the design of banknotes has become more "European". The reason is that the competition of the National Bank for the design and printing of Belarusian rubles was won by a producer from Europe. Who exactly, is not disclosed. Recall that the Republic of Belarus does not have its own mint with a printing press. In addition, its creation is also not planned, since, according to the management, it is too expensive and unprofitable for a small state.

The cost price of one note or coin is from 1 to 4 euro cents. From this it follows that a coin of 1 penny, for example, at the current rate is almost twice cheaper than the cost.

As noted above, the new bills have already become obsolete, since they were printed back in 2009. On them the signature of the former head of the National Bank, P.P. Prokopovich. In addition, there was a reform of the language in the country. On the notes are written "pjatsjisyat", and under the new rule there should be "pjatsjjasyat". But this discrepancy is promised to be eliminated on the following bills.

The largest banknote is 500 rubles. But how long will it last on a nominal Olympus with a high level of inflation? Time will tell.