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Belarus’ central bank expects H1 2019 inflation on par with last year’s

MINSK, 6 February (BelTA) – Inflation in Belarus in H1 2019 is expected to be on par with 2018, BelTA learned from Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Pavel Kallaur on 6 February.

The official said: “Inflation in the first half of the year is expected to exceed this year’s inflation target. Because the negative pressure on the part of the already existing temporary factors will not go away in the blink of an eye. Although their influence will fade away gradually.”

The NBRB head told media that inflation in this period can be close to the level observed last year, with small fluctuations above or below last year’s. “In 2018 inflation totaled 5.6%. So it can be 5.5% or 5.8%,” said the NBRB chairman of the board.

The effect of temporary market situation factors and inflation factors will be reduced in H2 2019. “The monetary management policy will remain neutral against the background of balanced growth. As a result, inflation will slow down to figures determined by the target indicator [5%],” Pavel Kallaur said.

In turn, Dmitry Murin, Head of the Central Office for Monetary Policy and Economic Analysis of the National Bank of the Republic of Belarus, said: “The interest rate is the main instrument to influence inflation. At least we are working towards making it so. This is why if we assume that inflation does not slow down in H2 2019, then we may have to make decisions concerning the interest rate policy, including the decision to raise interest rates.”

Dmitry Murin went on saying that one should not expect the central bank to make some radical moves. “We are now in a situation when the economy, the monetary conditions, and interest rates are in equilibrium. This is why in order to fix some scenario, small changes will suffice, including changes of the refinancing rate,” said the NBRB representative.

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