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Devaluation – to obey or to lead

Девальвация - подчиниться или возглавить

Ten years ago I had the sad experience when after a rest on new year holidays, were shocked by the fact that coming to work, found that our engineering firm in a single moment he lost huge money.

If readers of this article engaged in any business, particularly working with the state order, you should know that all the money flock to the contractor’s account in the last days of December. And if you pay suppliers Belarus-made components to make it possible, to send money abroad much more difficult.

And the exchange rate of the Belarusian ruble to the dollar jumped from twenty percent and we can say that during the crisis in 2008, my firm lost all that we have earned, plus the lost a financial cushion for the first months of next year. And it staff salaries, rent, warehouses, and other costs. The reason for the devaluation was the requirements of the IMF under a loan of four billion dollars.

In 2011, we should all remember what happened with the Belarusian economy, which was a panic in the market as people rushed to buy foreign currency to save their savings.

You can argue long about what happened actually, was it the failures of our government or the Minister of economy of Russia Kudrin promised Belarus bankruptcy for refusing to privatize industry, or all at once.

The main thing is that those events have shown that the Belarusian economy, integrated into globalization is so small and weak that to control and predict the rate of the Belarusian ruble, our monetary authorities are unlikely to. And public confidence in the national currency has been undermined.

For me, it is obvious that the process which you cannot control, you just need to lead. By the way, in some countries, the act of corruption, when bribes officials pay taxes, and intelligence agencies well see whose interests are lobbying for one or another official or the Deputy.

What would happen if the exchange rate of the Belarusian ruble will not be hanging out here and there, and planned to decline to the us dollar? Moreover, both the population and the business will know exactly when and what percentage of this course will vary.

Producers will plan procurement costs for imported components, and possibly to look for Belarusian producers who can meet their needs to reduce import costs and increase profits. Inflation will also be under effective control. The population of their savings will be kept in Belarusian rubles into deposits in banks, and banks will find it profitable to lend to Belarusian companies, without including the extra interest risks.

By the way, on this schedule it is possible to judge that the constant devaluation of the ruble, which took place until recently, led to the growth of welfare of the population.

Девальвация - подчиниться или возглавить

Not being trained as a economist, and using their reasoning elementary logic, you come to the conclusion that it is the devaluation stimulates growth of incomes of the population. And this applies first and foremost to the real economy, namely the wages of the working class and engineers.

According to the schedule, which reflects the trade balance also shows that holding the course until 2008, there was a growing trade deficit, and plus we came out sharply after the devaluation in 2011.

Девальвация - подчиниться или возглавить

After all, the devaluation of the Belarusian ruble makes imports more expensive and exports cheaper, which inevitably stimulates its own production. Corny to sew clothing, hiring seamstresses Belarusian become more profitable, than to bring in the Belarus import. Salaries are in Belarus, population’s incomes are growing and the economy is starting to develop.

And the retention rate leads to the opposite processes

The main profit of getting shops and banks that lend to these importers, the shops and markets are filled with imported goods, often produced by the peoples of Africa and Asia, where production costs are significantly lower than in Belarus.

A Belarusian plants and factories in this case the banks to not lend profitably, and thus begins to decay Belarusian industry. Falling wages at factories falling purchasing power of the population, and the currency is moving abroad. Here is what is happening now in the Belarusian economy.

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