Belarusian ruble floats free, dives 52 percent

The official exchange rate of the Belarusian ruble fell 52 percent Thursday, as the cash-strapped country floated its currency. The new unified session of the Belarusian Currency and Stock Exchange set an exchange rate of 8,680 rubles per U.S. dollar, against 5,347 previously. It is the second major devaluation this year in the official rate, which began the year at 3,000. The previous devaluation was in May. Belarus is facing a severe financial crisis due to a large trade deficit and rapidly falling hard currency reserves. The country was due Thursday to relax more of its strict currency trade regulations to meet conditions for an IMF rescue loan that could pull it through the winter months. The full market free float follows a week of special short sessions in which the local ruble was traded freely while most firms were forced to sell their foreign currency at a less advantageous official rate. Analysts say the free float will restore the balance between supply and demand for foreign currency and will lead to the current account re-balancing. President Alexander Lukashenko predicted earlier this week that the ruble rate would soon stabilize and start climbing again. In May, the Belarusian National Bank devalued the ruble by 56 percent. The World Bank said the devaluation was the biggest in 20 years.