Saturday, June 11, 2011

Today's M^3 - Belarusian Ruble Devalued by 66%

My condolences to all the savers in Belarus who's central bank took it upon themselves to devalue the currency by 66%. The actual event occurred last Tuesday (5/31/2011) but the new rate didn't show up in my data provider until a couple of days ago. The intention of course is to make ruble denominated debts easier to pay off and exports more attractive. However this type of severe disruption isn't without negative side effects.

This today from Bloomberg:

The Belarus government banned individuals from taking basic consumer goods such as home appliances, foodstuffs and gasoline out of the country following a devaluation of the local currency.

People are also barred from leaving the country by car more than once every five days as of today, according to an e-mailed government statement.

The Beeb posted this on Tuesday regarding energy supplies from Russia:

A source at Inter RAO IUES.MM, the export monopoly, told Reuters news agency: "If Belarus doesn't pay, supplies will be shut off entirely on June 19."

The government in Minsk said it hoped to resolve the matter "as quickly as possible".

"However, it is important to note that the country has certain problems with its currency," an energy ministry spokeswoman said.

Commodity prices have gone up? No one could see that coming. From the WaPo on Wednesday:

Thousands of motorists took part in Tuesday’s action, and some parked in the middle of Minsk’s main avenue to protest high gas prices that have nearly doubled since March to 5,800 Belarusian rubles ($1.10) per liter.

For those of you who don't think something like this could happen in the US, allow me to dredge this up (from wikipedia):

The Gold Reserve Act outlawed most private possession of gold, forcing individuals to sell it to the Treasury, after which it was stored in United States Bullion Depository at Fort Knox and other locations. The act also changed the nominal price of gold from $20.67 per troy ounce to $35.

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