07:35 GMT25 February 2020
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    Lukashenko orders free float for Belarusian ruble from mid-September

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    Belarus will allow its currency, the Belarusian ruble to float freely from next month at a special trading session but the central bank will fend off speculative attacks on the currency, President Alexander Lukashenko said on Tuesday.

    Belarus will allow its currency, the Belarusian ruble to float freely from next month at a special trading session but the central bank will fend off speculative attacks on the currency, President Alexander Lukashenko said on Tuesday.

    "The Belarusian ruble's rate will be set by supply and demand," Lukashenko said at a government meeting.

    "I have agreed with the proposal of the national bank to open ... an additional trading session at the currency exchange from the middle of September where you can buy hard currency easily," he added.

    Belarus is facing unprecedented political and economic turmoil, with frequent protests breaking out in response to a sharp downturn in living standards.

    In spring, the government devalued the national currency by more than a third, froze prices on some staple foods and introduced fuel rationing to keep the lid on a deepening financial crisis which followed generous increases in wages to state employees ahead of the December presidential elections, and a widening trade deficit.

    Companies now must sell a third of their hard currency earnings to the state. Buying hard currency, including the Russian ruble, is now virtually impossible for Belarusian households.

    Lukashenko said that after the new session is launched, all exchange points must start selling hard currency.

    He said he had ordered the state control committee to pre-empt those trying to put pressure on the rate, including through the media.

    "The national bank must monitor the situation on a daily basis and intervene, when necessary to fend off speculative attacks," Lukashenko said.

    "And God forbid you for not stabilizing the situation in the financial sphere," Lukashenko told the government and the central bank.

    Stabilizing the nation's finances is one of conditions for the disbursement of a $3 billion credit by the Eurasian Economic Community (EurAsEC), a post-Soviet economic bloc led by Russia. The first $800-million tranche was sent to Belarus in June.

    Last week, EurAsEC warned it might postpone the second tranche of the bailout if Belarus failed to reform its economy.

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