Why did inflation rise sharply in Belarus in 2011 and 2012?

The sharp rise in inflation in Belarus during 2011 and 2012 was primarily driven by a severe foreign exchange crisis and a soaring budget deficit.1

As foreign currency reserves declined sharply, the Belarusian rubel underwent a significant devaluation, losing more than 60 percent of its value against the U.S. dollar throughout 2011. This rapid depreciation of the national currency triggered a wave of inflation that reached a peak of nearly 110 percent in January 2012.1

In response to this economic instability, the central bank raised interest rates to 45 percent, which was the highest rate in the world at that time. The economy was eventually stabilized through a $3 billion bailout program, which was primarily financed by Russia.1