With reference to Nasha Niva, the Belarusian service of Radio Liberty reports that Deutsche Bank, the main correspondent bank of Belarusian state-owned financial institutions, has closed its correspondent accounts in euros. Evidence of this could be seen by looking at the list of respective accounts of Belagroprombank. Judging by this list, currency transactions are now only available through the Russian TKB Bank; whereas previously, multiple European banks could handle such transactions. Put simply, this change means that European banks are likely to close all transfers in euros for Belarus. In some cases, they may still be possible, but the cost of those transactions will increase. Twenty-four banks currently operate in Belarus, four of which are state-owned. In 2018, 50 percent of all domestic financial assets belonged to the four largest state-owned banks: Belarusbank, Belagroprombank, Dobrabyt Bank and Belinvestbank. These large, government-controlled financial enterprises will survive, economist Lev Lvovsky assured. But smaller banks may disappear. The United States’ sanctions on Belarusian banks may make holding dollar accounts effectively impossible, as almost all correspondent banks that transfer dollars and euros are somehow tied to US jurisdiction. This will pose problems if a person receives money in foreign currency on a bank card, owns a company that does business in other countries, or receives remittances from abroad, Lvovsky said (Svaboda.org, September 15). Unquestionably, Western sanctions are having a deleterious effect on the Belarusian economy. But what can they actually achieve?
Read Full Article »
