OREANDA-NEWS. October 9, 2012. Belarus’ government will restrain the decline of the exchange rate of the Belarusian ruble till the end of the year in a bid to meet the USD 500 wage target and the 22% inflation target.

Experts made a statement to that extent in an interview following the fall of the Belarusian ruble to Br8,500/USD 1 on September 28, the lowest pitch the ruble has fallen to since early this year.

Experts say the authorities will be at pains to freeze the fall of the Belarusian ruble to make sure the average monthly salary should reach the ruble equivalent of USD 500 by the year’s end.

At the same time, the authorities will be struggling to keep inflation growth within 22%, which will be a hard job, as tariff growth in certain sectors has already outrun the growth in consumer prices in January-August. Besides, Belarus’ broad money supply has expanded by almost 50% since early this year (target – 34%).

Belarus may choose to keep the exchange rate at Br8,500/USD 1 till the end of the year to reach the USD 500 target, provided private households do not rush to buy foreign currency from banks after the wage increase.

A policy aimed at reducing the refinancing rate, stimulating salary growth and freezing the rate of the local currency has been creating an inflationary bubble. To prevent the bubble from bursting, the government needs to have additional funds, which may be a problem next year in light of the pressure to pay off debts and meet other external liabilities.