MINSK, Belarus - May 24, 2011 - Belarus has cut the official value of its currency against the dollar by 36%.

The country faces a severe financial crisis, thanks to a large trade deficit and rapidly falling hard currency reserves.

Many shops have been emptied of goods, as importers lack hard currency to purchase foreign goods and exporters are required to repatriate 30% of their foreign currency earnings at the official exchange rate.

"What they've done today is a positive step," says economist Alex Pivovarsky of the European Bank for Reconstruction and Development.

He explains that Belarus has lost international competitiveness over recent years, not least because its government raised wages significantly last year in the run-up to elections.

While the devaluation means that wages are not worth as much in dollar terms, it also means the country will become more competitive, analysts said.

With hard currency rapidly draining from the country's reserves, the president, Alexander Lukashenko, secured a $3 billion bailout loan from Russia last week.

However, the rescue loan, which will only be available in installments over three years, only covers a fraction of the country's enormous trade deficit.

It also came with conditions from Moscow, including a three-year privatization program, which is due to start next month.

The country had already laid out positive steps toward liberalizing its economy as part of its latest five-year plan, according to Pivovarsky.

This included the planned transfer of about a fifth of the workforce into the private sector, by means of privatization, as well as encouraging start-ups and foreign direct investment