Financial panic swept the republic of Belarus today after its currency was sharply devalued.
Crowds cleared store shelves and queued up at currency exchange offices in a desperate attempt to protect their savings.
President Alexander Lukashenko promised that the national currency will remain stable following the devaluation enacted a day earlier, but experts warned the Belarusian rouble will continue its nosedive if Russia does not provide a quick bailout.
The rouble lost nearly half of its official value against the dollar yesterday, when the National Bank ordered a devaluation. The new official rate is 4,930 roubles per dollar, up from the previous 3,155 but the perceived value of the local currency is much lower – on the black market it takes 6,000 roubles to buy a dollar.
To make matters worse, there is a physical shortage in the country of dollars and euros, which companies and households desperately want to own to protect themselves from a worse devaluation in the future.
The government has tightly regulated sales of hard foreign currency and its own reserves are badly depleted. Exchange offices have run out of foreign currency because they are allowed only to sell what they buy from clients.
Andrei Krylevich, 42, has spent a week in queues outside an exchange booth in Minsk without a chance to buy a single dollar. The computer company he works for has sent its employees on an unpaid leave, and he urgently needs to pay back a bank loan.
“In just one month, I have virtually turned bankrupt, the entire country has gone bankrupt,” he said.
Most Belarusian industries are state-owned, and the government has tried to keep its scarce currency reserves for vital imports.
Mr Lukashenko, in power for nearly 17 years, has kept an unusually low profile in recent weeks as his government has been pleading Moscow for a vital loan. Russia has been reluctant to provide it, pushing Belarus to sell its industrial assets.