Belarus is unable to repay its foreign debt because of economic sanctions imposed by the U.S. and the European Union over its alliance with Russia in its war in Ukraine.
“The possibility of repaying debt obligations in foreign currency in the standard manner is currently limited due to the sanctions against Belarus,” the country’s finance ministry said Wednesday in a statement. The World Bank on Monday said it had put loans made by its main lending unit to Belarus into “nonperforming” status, effective immediately, due to past-due amounts of $68.4 million.
The developments come after Belarus in July was declared in default by Fitch Ratings and Moody’s Investors Service, which said Russia’s ally had not kept up on its debt obligations to foreign investors.
Belarus announced in late June that dollar payments due on its foreign bonds would instead be paid in local rubles into an account at Belarusbank.
Alexander Lukashenko, president of Belarus, let his country be used as a base for Russia’s invasion of Ukraine in February. On Monday, his defense ministry said it would hold live fire exercises and anti-aircraft guided missile launches with Russia, Reuters reported, citing the Russian news agency Interfax.
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