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27 Jun 2018

Belarus’ central bank’s refinancing rate down to 10% per annum

MINSK, 27 June (BelTA) – As of today the refinancing rate has been reduced from 10.5% to 10% per annum. The rates on standing facilities and bilateral liquidity support operations have gone down from 11.75% to 11.5% per annum, representatives of the Information and Public Relations Office of the National Bank of the Republic of Belarus (NBRB) told BelTA.

The relevant decision was made by the NBRB Board at the quarterly session held on 20 June to discuss monetary management policy. NBRB representatives said: “The annual inflation is slowing down. Projections concerning the situation in economy, foreign trade, the currency market, and the deposit market indicate that the emerging money and credit conditions will keep inflation within the targeted range.”

In May 2018 consumer prices rose by 4.4% year-on-year, with the prices up by 5% in April 2018. The annual core inflation slowed down to 2.9% (3.1% in April), including due to the stronger Belarusian ruble against the basket of foreign currencies.

Inflation is expected to grow slightly in H2 2018 taking into account the weaker disinflation effect of the domestic economy and a possible increase in regulated prices. The exchange rate of the Belarusian ruble staying close to the equilibrium level will not put pressure on prices. Monetary conditions will remain close to neutral ones and will continue helping achieve price stability. Inflation is expected to reach 5.5% at the end of the year.

The domestic demand is expected to have a moderate effect on prices in the medium term. Inflation will be slowed down in the medium term thanks to the gradual reduction of inflation expectations in view of the current moderate dynamics of consumer prices and the orientation of the monetary management policy towards keeping the prices stable.

Pro-inflation risks of the money supply are expected to be low. After the predicted acceleration early this year the growth of the average broad money supply is getting back into the targeted range of 9-12%. In May the growth of the average broad money supply reached 12.3% year-on-year. The central bank will continue enabling conditions to support the increased readiness of Belarusians to keep their savings in Belarusian rubles. It will also help keep inflation within the targeted range.

The NBRB Board is expected to hold the next quarterly meeting to review the monetary management policy on 19 September.

The central bank previously reduced the refinancing rate to 10.5% per annum on 14 February 2018.

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