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. Last Updated: 07/27/2016

Belarussian Central Bank Bans Interbank Forex Trade

MINSK, Belarus -- The Belarussian central bank said Wednesday that it would stop domestic banks from buying hard currency from foreign banks starting Thursday.

The bank said it was imposing the limits as part of the government's program to stabilize the former Soviet republic's troubled currency market. Russian banks will be most affected by the new order.

"This decision of the National Bank, after all the other limitations, effectively closes the interbank market," said a currency dealer in the capital, Minsk. "This cannot go on for long -- either commercial banks die or the National Bank does," the dealer said.

Buying dollars and other currencies from foreign banks was one of the few means of bringing hard currency into the Belarussian market.

The official exchange rate pegged the Belarussian ruble at 38,550 to the dollar, but commercial banks had to pay up to 69,000 Belarussian rubles for a dollar on the interbank market.

Meanwhile, a World Bank representative in Belarus said his organization was withdrawing from the former Soviet republic, as the government had failed to fulfill agreements. "After several years of signing agreements, the government did not fulfill them. If agreements have been signed and are not fulfilled, we have to abandon Belarus," the representative, David Phillips, said.