In February 2014, the government of Belarus announced a change in its trade finance instruments.



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Inception date: 04 Feb 2014 | Removal date: open ended

Trade finance

On 4 February 2014, the Government of the Republic of Belarus and Ukrgasbank (a key commercial bank in Ukraine with Ukrainian state participation of ca. 95 per cent) signed a contract with beneficial conditions for the supplies of Belarusian goods (general purpose machinery, agricultural equipment, automotive and road-building machinery, cars, lifting and transformer equipment, engines, and other equipment) on the Ukrainian market. The purpose of the state-supported financial scheme is to reduce the financing cost and thus increase the attractiveness of the offered machinery to the Ukrainian consumers. Since the state-supported trade finance scheme helps banks lend below the market rate, other banks are also interested in participating (see the second source).
The bank loans will be issued in the national currency of Ukraine, hryvna, with a maturity of up to five years. There is no upper limit to the bank loan amount. This bilateral state initiative may have a considerable trade impact because currently Belarus is the fourth largest supplier of Ukraine (USD 3.3 billion for 11 months in 2013 according to the official statistical data of Gosstat).