Saturday, April 16, 2011

Defaulting Central Bank

I am planning a trip to Moscow soon and hence was running through the news wires of russia and some others. Came across this interesting report by a paper in Belarus. Apparently, central banks, like any other bank, are at a risk of a bank run.

April 15, National Bank of Belarus has suspended the sale of bars of precious metals (gold, silver, platinum) for Belarusian rubles. The National Bank has explained that currently the precious metals can only be bought for dollars. At the same time, the redemption of bars is made in Belarusian rubles.
so in effect a central bank induced slow-dollarisation. Interesting.....