Belarus may ask Russia for a loan worth $3.5 billion, as US sanctions against the public debt of Belarus create problems for refinancing it, including with foreign currency borrowings, First Deputy Prime Minister of Belarus Nikolai Snopkov said, BelTA news agency said. The amount of the loan will help to "offset the European money shortfall" and protect the debt from the influence of Western restrictive measures.
"At the moment, we are considering a new stabilization program with the Eurasian Fund for Stabilization and Development with a state financial loan allocated by the Russian Federation," Snopkov said. In 2022, Minsk will have to pay off $3.3 billion, and in 2023 — $4.7 billion of external debts along with servicing.
Because of the pressure from the West, Belarus will have to deal with a lack of foreign investment.
"As most international financial organizations have refused to cooperate with the Republic of Belarus and there are no other options to attract investment funds, internal resources and internal reserves remain practically the only source of development and economic growth," the official said.
In December, the United States imposed sanctions on the Belarusian public debt, having thus banned US investors from participating in its refinancing. US citizens and organizations were prohibited from concluding all transactions with a new debt of more than 90 days issued on or after December 2, 2021, including the provision of funding and other transactions.
Brian O'Toole, a senior adviser to the director of the Office of Foreign Assets Control, said that the new restrictions would leave Belarus without dollars. Belarus will not be able to attract foreign currency in the domestic market, because US correspondent banks will no longer serve those transactions.
It is worthy of note that the Belarusian economy is highly dollarized: about 60 percent of government bonds are denominated in the US currency. The Development Bank, which provides loans to national projects, holds $115 million worth of bonds in circulation. The US sanctions will thus deal a tangible blow to Belarus.
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