MINSK, May 16 (Reuters) - The troubled Belarussian rouble sank further in interbank trading on Monday as the country's currency crisis deepened, threatening to erode people's incomes and eat away at the value of savings.
In early trading, the national currency tumbled to 6,300 roubles per dollar from 5,900 on Saturday, trading at half its official rate, one market source said.
"There is quite a strong decline from early morning. The quotes are quite chaotic. I think the market is trying to find a rate," the source said.
The sharp devaluation, which set in dramatically in the ex-Soviet republic last week after Russia snubbed a request for a bailout loan, is eating away at ordinary people’s incomes and savings.
Wage increases by President Alexander Lukashenko ahead of December’s presidential election which he won are also eroding.
Russia, Belarus’s main supplier of oil and gas but which, like the West, often finds itself at odds with Lukashenko, told the authoritarian leader last week that Minsk could only get $1 billion this year from a special fund and advised it to seek help from the International Monetary Fund.
The IMF, however, has been unimpressed by the slow pace of real reform in the country, whose economy is still run along Soviet lines with state ownership of key industrial sectors.
A concerted international effort to help Belarus seems unlikely given its increasing isolation following a crackdown by Lukashenko on his political opponents last December.
In spite of sanctions by the United States and the European Union, Lukashenko has pressed on with the crackdown on the opposition.
Opposition leader Andrei Sannikov, who ran against him last December, was jailed for five years on Saturday and another four ex-presidential candidates are also on trial.
MULTI-TIERED EXCHANGE RATE
A multi-level exchange rate system is now operating in the ex-Soviet republic, which lost a quarter of its foreign currency this year trying to support the rouble in the face of a large current account deficit.
Monday’s interbank rate compared with an official rate of 3,084 roubles per dollar at which exporters must sell 30 percent of their foreign currency revenues to the central bank.
Alongside this, retail cash points operating for ordinary citizens on Monday pegged the dollar at around 4,000 roubles.
A black market where other rates operate has sprung up.
Belarus had asked Russia for $3 billion in emergency loans but Moscow said last week that only $1 billion was on the cards this year from a special fund.
Ordinary Belarussians are still largely unable to buy foreign currency at the advertised "cash" rate which sources say has been informally set by the central bank.
Those who do have foreign currency are waiting for cash points to catch up with the interbank market.
"Nothing has changed," said Yevgeny, 51, as he stood outside one exchange point in downtown Minsk. "People are just no longer allowed to queue up here."
Instead of trying to queue, Minsk residents are operating a "virtual" queuing system among themselves, checking in with one another regularly to get updates on prospects of getting currency.
"There are dozens of people in the ‘queue’ here," said Dmitry, 22, who was the only person standing next to an exchange point in a busy supermarket. "But it’s not as bad as in GUM (Minsk’s main shopping centre) — there are 300 there."
Others turn to social network-like websites where rates vary wildly but are generally somewhere in between the cash rate and the interbank rate.
Importers are adjusting their prices in line with the plunging interbank rate and factoring in expectations of even further devaluation.
Some items such as bananas have already tripled in price.
Prices of vegetables, which are mostly imported, rose by more than 24 percent month-on-month in April, according to official statistics.
Lukashenko raised public sector pay by 40 percent last year, bringing the average monthly wage to an equivalent of $500 and promising to double it within five years.
However, the first quarter’s average monthly wage is worth just $232 calculated by Monday’s interbank rate.
