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What is going on in the foreign exchange market and what currency is the best to keep savings

Focus on the ruble

Individuals sell foreign currency more actively than buy

At the beginning of the year, the National Bank released a statistical update on purchase and sale of foreign currencies on the domestic market. Following the January — December 2022 report, individuals more actively sold foreign currency than they bought. In 12 months, $10.058 billion was sold, $10.032 was bought. The current situation on the foreign exchange market, why the National Bank removed the euro from the currency basket and what to expect from the Belarusian ruble exchange rate, – we discussed this with Aleksey Bykov, analyst of the Belarusian Institute of Strategic Research .

о том, что происходит на валютном рынке и в чем лучше хранить сбережения

— Alexey, at the end of last year, the Board of the National Bank decided to exclude the euro from the currency basket and set new weights of currencies in calculating its value. How did it affect an ordinary person?

Алексей Быков

— It did not affect. The euro was sold in exchange offices, and is being sold. The thing is that the basket of currencies is the internal benchmark of the National Bank, whose main goal is to reduce inflation. To do this, the exchange rate of the Belarusian ruble is monitored. And it is defined as a weighted average against a basket of currencies. That is, I repeat, in order to understand the dynamics of one's national currency relative to others, such an assessment method as a basket of currencies is used. After December 12, the share of Russian ruble in the basket of the National Bank is 60%, the Chinese yuan — 10%, and the US dollar – 30%.

Neither foreign exchange market, nor rate mechanism within the country are affected by the basket.

— Why did the National Bank remove the euro from the basket of currencies?

— The volume of trade that was settled in euros has decreased. In 2021, for example, there were large volumes of trade in euros. 35 percent of exports were paid for in euros, and 26 percent of imports were paid for in euros as well. Now these volumes have sharply declined.

— Many people are concerned about the question, what currency is it best to keep savings.

— In the current situation, in the conditions of turbulence of the entire world economy, there is no definite answer. Everyone can do as his intuition tells him. I am sure that readers know about diversification — keeping in different assets. It is important not to forget about their liquidity so that you can quickly sell an asset. For example, the precious metals liquidity is much less than that of currencies: gold prices are rising, but its sale is significantly inferior to the purchase price. People benefit more from those assets where the gap between buy and sell rates is small.

If you keep money in Belarusian rubles, then at least you won't lose anything on buying and selling, as with foreign currencies.


— Our country experienced deflation for several months. How can it affect the general level of price of goods and services in the near future?

— Let me remind you that inflation has internal and external sources. Internal sources are when our manufacturers and importers themselves raise prices setting higher trade and import surcharges. But now this tool is minimized due to the new legislation: Presidential Directive No. 10 "On the inadmissibility of price increases" and Resolution of Council of Ministers No. 713 "On the price regulation system". Actually, internal sources of inflation are reduced to a possible minimum.

Why can prices rise? Only due to external sources: if imported goods either arriving our consumer market or used as intermediates in the production of Belarusian goods, become more expensive. Whether they will rise in price, it is hard to say. If we talk about raw materials — energy resources or metals, now there is a decline in commodity markets, a decline in prices. This is due to various factors. One of the main ones is the policy of the US Federal Reserve System, which has increased interest rates, followed by a decrease in commodity prices.

If everything stays the same as last year, then even under limited supplies, we will not have serious sources of inflation. The market has gradually coped with the search for alternative supply channels for certain groups of goods, in particular, from China. But again, we live in an unpredictable world, there are always some force majeure.

— In your opinion, don't we, Belarusians, pay too much attention to monitoring rates, questions about what to keep, how to keep, etc.?

— Today, the population of the country is actively improving its financial literacy — and this is very good. What's more, the fact that people have a question about what currency is the best to keep their funds suggests that they have free money. And that's a positive thing.