Ex-Belarus Bank Chief Criticizes Proposed Dollar Peg

The Belarusian ruble (official site) August 16, 2007 (RFE/RL) -- The former head of Belarus's National Bank (BNB), Stanislau Bagdankevich, says pegging the country's currency to the U.S. dollar would be a bad economic move.

A planning paper from the BNB suggests that Belarus unhook its currency from the Russian ruble as of 2008 and tie it to the U.S. dollar. The bank said such a move is needed to stabilize the Belarusian ruble and increase international trade.


Speaking to RFE/RL's Belarus Service on August 15, Bagdankevich said the move would be positive from the point of view of Belarus's "sovereignty," in that it would lessen Minsk's dependence on Moscow.


But he added that it would make no economic sense, because Belarus needs to orient its economy toward the European Union and Russia, as well as the United States.


Bagdankevich said politics is most likely behind the proposal.


"In today's situation, I think [unhooking the Belarusian ruble from the Russian ruble] is more of a political decision," Bagdankevich said. "Evidently, [Belarusian President Alyaksandr] Lukashenka has decided to drive another stake into the idea of creating a union state."


If enacted, the change would underscore the deteriorating relations between Minsk and Moscow. The traditional allies have been increasingly at odds since a dispute over energy prices in December 2006.


A BNB spokesman, Mikhail Zhuravovich, told RFE/RL's Belarus Service that no decision has been made and that the idea is simply being discussed.