Belarus: Belarusian ruble dives against the U.S. dollar
The Belarusian ruble (BYR) plunged against the U.S dollar over the past month amid the increasing global economic fallout from the fast-spreading Covid-19 pandemic. The ruble ended 3 April at 2.59 BYR per USD, a 10.9% depreciation over the same day in March. Moreover, the currency was down 13.8% year-on-year and 15.5% year-to-date.
The currency came under significant pressure in recent weeks as global economic prospects deteriorated markedly due to widespread lockdowns in most major economies and the associated shocks across the financial and commodity markets. The Belarusian ruble has been increasingly suffering from investors’ growing risk aversion and rising demand for foreign exchange in the domestic forex market. Moreover, the BYR was further dragged down by a marked depreciation of its Russian counterpart, which plummeted over the recent weeks in response to a global oil price crash.
Going forward, significant headwinds are likely to affect the stability of the Belarusian ruble. A worsening global economic backdrop and weakening demand for emerging market currencies are set to continue weighing on the BYR, with subdued global oil prices adding further downward pressure. The Central Bank, meanwhile, seems reluctant to drastically intervene in the foreign exchange markets and appears committed to a flexible exchange rate regime.