Belarus has asked for an emergency loan of up to $8 billion (5.5 billion euros) from the International Monetary Fund to stave off a financial crisis in the ex-Soviet republic.
That comes after the government massively devalued the local currency, the rouble, in a failed attempt to persuade banks and Belarussians to resume trading at official – rather than black market – rates.
The official inflation forecast is 39 percent, even with the price of food staples ordered frozen.
The rouble was just devalued by 56 percent and a large trade deficit is also pressuring the currency.
Belarussians have been queuing at exchange points hoping to convert some of their savings into foreign currency.
The government’s freezing of prices of items such as fish, tea, coffee and some fruits and vegetables, sausages and cheese is seen by analysts as a desperate move to prevent social unrest.
Belarus is also looking to Russia for help but President Alexander Lukashenko has warned Moscow it will not sell off state assets cheaply to secure any emergency loan from the east.
Lukashenko, who has been president since 1994, has faced growing criticism from the West over a crackdown on opposition activists after his re-election last December.
The IMF issued $3.5 billion in loans to Belarus from 2009 to 2010 and has sent a mission to assess the situation in the country of almost 10 million people, long shielded by the government’s Soviet-style economic policies.