Belarus is working on obtaining new loans from Russia amid sanctions that have cut off its economy from key foreign currency sources.
Minsk is negotiating a new government loan, as well as additional funds from the Eurasian Fund for Stabilization and Development, which is 90% funded by Russia, said First Deputy Prime Minister of Belarus Nikolai Snopkov.
"The total amount of the requested funds is $3.5 billion," he said at a meeting with the Belarusian dictator Alexander Lukashenko. New Russian loans "will compensate for the loss of European money to refinance the debt," Snopkov said.
In 2022, Belarus will have to repay $ 3.3 billion of foreign loans, and in 2023 - $ 4.7 billion along with interest payments.
At the same time, the inflow of currency into the Belarusian economy is collapsing due to sanctions. The EU has stopped imports of all Belarusian petroleum products, and the United States has introduced measures against the Belarusian potash producer Belaruskali, banning its trading arm (Belarusian Potash Company, BPC) from dollar transactions.
In addition, the fifth sanctions package hit the Belarusian national debt, completely shutting the door for Lukashenko to world capital markets.
As a result, there was a "direct risk to the ability to refinance the loans, including to domestic borrowing," Snopkov said.
Most international financial organizations refused to cooperate with Belarus. Minsk has no other options for attracting investment funds, Snopkov told Lukashenko, adding that "the only source of development and economic growth are internal resources and internal reserves."
The volume of these reserves in terms of foreign currency is negligible. As of December 1, the Belarusian National Bank reported that it had $ 8.744 billion in gold reserves. At the same time, more than half of the foreign currency reserves is in gold and illiquid assets, and only half as much - $ 3.944 billion, is in cash. This money is barely enough for a year of payments on foreign loans.
On December 10, Lukashenko held another telephone conversation with Russian President Vladimir Putin and, according to his press service, discussed "emerging challenges for the two countries."
A day earlier, Putin condemned statements that Belarus was "on Russia’s payroll", calling them incorrect and impermissible.
Putin said that the creation of the Union State was a long and delicate process requiring exceptional competence.
Last August, Putin gave $1.5 billion to Lukashenko, whose regime nearly collapsed after protests in response to elections unrecognized by the West. In 2021, Belarus received another $ 1 billion in loans from Russia and deferred repayment of old debts.