Belarus

Belarus

Annual inflation in Belarus, as measured by changes in consumer price inflation,

or CPI, has been very high during

the 1990s. It stood at 294 percent by the end of 1999. There were several reasons

behind the inflationary pressure on the economy. The 1998 Russian monetary crisis

had a negative effect on the Belarusian ruble due to the dependence of the Belarusian

economy on Russia. Government subsidies to several sectors of the economy

(such as agriculture and housing) supported bad lending practices, poor weather

conditions caused low agricultural production, and the government's periodic

expansion of the money supply caused a devaluation of the Belarusian ruble.

In February 1993 Belarus set up the Inter-Bank Currency Exchange which is

the main trading forum of the legal currency market. Trades are performed

in 4 main currencies: the U.S. dollar, the German mark, the Russian ruble,

and the Ukrainian grivna. The Russian financial crisis of 1998 forced the

Belarusian ruble to depreciate against the Russian ruble and the U.S. dollar.

In April 2000 the exchange rate stood at BR435 to US$1. The depreciation of the

Belarusian currency continued to accelerate in the following months, reaching a

whopping BR1,247 to US$1 by mid-February 2001.

Exchange rates: Belarus

Belarusian rubles per US$1

2000 1,180

Dec 1999 730,000

Jan 1999 139,000

1998 46,080

1997 25,964

1996 15,500

Note: On January 1, 2000, the national currency was redenominated at onenew

ruble to 2,000 old rubles.

SOURCE: CIA World Factbook 2001 [ONLINE].

GDP per Capita (US$)

Country 1975 1980 1985 1990 1998

Belarus N/A N/A N/A 2,761 2,198

United States 19,364 21,529 23,200 25,363 29,683

Russia 2,555 3,654 3,463 3,668 2,138

Ukraine N/A N/A N/A 1,979 837

SOURCE: United Nations. Human Development Report 2000; Trends in human development

and per capita income.