Belarus Should Abolish The Currency Trading Restrictions

The coins made in gold, silver and bronze were traded during Roman Empire and the shortage of coins created a barrier for money circulation. However with the establishment of paper money, a sophisticated banking, global clearing system and electronic money, the global financial system evolved with a worldwide framework of legal agreements. In the Global Financial market, foreign currencies issued by the world, countries are traded by the buyers and sellers using currency exchange rates. Now a day, it is very common practices of companies in one country to raise capital in a foreign country by listing their stocks on major foreign exchanges given the growth of equity markets are becoming more globalized (SNHU, 2015).

Belarus decides to abolish the currency trading restriction

The net values of Belarus imported goods and services from other countries exceeded its export of goods and service to other countries creating a large Current Account Deficit. The reason Belarus a former Soviet republic scraped the currency trading restriction is due to the fact its political leadership allowed the Belarus national currency ruble to depreciate as part of a strategy to reduce the current account deficit. The unification of the exchange rates will allow the currency market ability to function as before. The overheated economy under a loose monetary policy created this crisis and the difficulties will be overcome by abolishing the restriction on currency trading. The political promise of 50% increase in wages to the government workers have impacted with no real values other than buying foreign currency and goods. According to Arkhipov and Abelsky (2011), abolishing the currency trading restriction is necessary given the current practice of doin...

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...d lend less money. During such period the central bank pumps more money to the local economy which it already secured through the bailout money from Russia. Also, it does adjust its policy allowing Banks to keep lower capital, thus allowing more money available for lending and stimulate the economy. The central Bank also made higher ruble rates for those who have saved in dollars before devaluation of the currency and help those with Belarus rubles make purchases in dollars (Belarus scraps currency restrictions, 2011). The foreign businesses such as automobile industry have many vehicles on the lot, but needs additional foreign currency such as euro or dollar for procuring services and parts. The local Ruble needs to strengthen its values otherwise, many foreign and multinational companies will have to close its business due to lack of access to the foreign exchange.