Belarus: On 4 November 2015, the decision to hold the third and so far the biggest denomination of the national currency was adopted by Edict no 450 of the President of the Republic of Belarus.
Previous denominations took place in 1994 and 2000. Without them 1 US dollar would have cost approx. 200 000 000 Belarusian rubles instead of current 20 000. As of 1 July 2016, when denomination starts, 1 US dollar will be estimated at approx. 2 Belarusian rubles.
According to the Edict, the Belarusian ruble will be reduced 10 000 times; and the currently circulating cash notes issued in 2000 will be replaced by new banknotes and coins.
The plan is to introduce banknotes of seven face values (5, 10, 20, 50, 100, 200 and 500 rubles) and coins of eight face values (1, 2, 5, 10, 20 and 50 cents as well as 1 and 2 rubles).
Between 1 July 2016 and 31 December 2016 both old and new money will be circulating. On the expiry of this period and until 31 December 2019, the National Bank, banks and nonbank credit and financial institutions of the Republic of Belarus will be exchanging old currency notes. From 1 January 2020 to 31 December 2021 exchange will be possible only at the National Bank.
Reducing the money supply aims at improving monetary circulation. The current denomination is a part of the credit and financial policy of the new National Bank team focused on stabilizing the currency in terms of both inflation and foreign exchange rates. In addition, the forthcoming denomination aims to simplify calculation and payments.
Reduction of the face value of the Belarusian ruble by a factor of 10 000 means that 10 000 Belarusian rubles before 1 July 2016 have now turned into one new Belarusian ruble, and 100 old Belarusian rubles change into 1 cent.
Wages, retirement pensions, scholarships and allowances will be recalculated under the denomination.
In accordance with a Letter from the Belarus Ministry of Labour and Social Security no 1-2-12/525 of 15.03.2016 about the procedure for calculating wages in line with the denomination, all payments set by regulatory legal acts as well as local regulations are to be decreased 10 000 times. Since staffing is a local normative legal act, the Ministry of Labour and Social Protection considers it reasonable to bring it into line with the Edict.
As for employment contracts and those clauses that relate to an employee’s work remuneration in particular, it is recommended to conduct routine technical adjustment of corresponding sums stated in contracts. It follows that applying the provisions of Art. 32 of the Belarus Labour Code on the procedure and terms for changing essential working arrangements is not necessary in this case.
Prices for goods now also lose four zeros. The Belarus Ministry of Trade issued a Letter on 25.03.2016 clarifying the procedure for rounding-off prices (tariffs) for goods (work, services).
The currency reform also refers to securities, where the procedure for denomination is soon to be set by the Belarus Ministry of Finance. The plan is to set the reduction ratio of the face value of shares at 1 cent. For this reason, those joint-stock companies whose shares had a face value pre 1 July 2016 that is less than or not divisible by 100 old Belarusian rubles should undertake one of the following steps (as well as undergo accompanying administrative procedures):
1) to increase the authorized share capital at the expense of own capital by increasing the face value of shares,
2) to reduce the authorized share capital by reducing the face value of shares,
3) to consolidate shares.
Sources: National legal Internet portal of the Republic of Belarus (NLIP) 06.11.2015, 1/16092;.
Letter from the Ministry of Labour and Social Security of the Republic of Belarus no 1-2-12/525 of 15.03.2016.
Letter from the Ministry of Trade of the Republic of Belarus no 03-16/257к of 25.03.2016 “On rounding-off prices (tariffs)”.