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Further reduction of key lending rate depends on Belarus' balance of payments

MINSK (BelTA) – Further actions to reduce the refinancing rate in Belarus will be closely intertwined with the country's balance of payments, BelTA learned from Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Pavel Kallaur on 23 August.

“As far as further steps are concerned, there is no doubt we are going to act in a very balanced and careful manner. We are going to, first of all, evaluate the state of the balance of payments and make the relevant projections for the future,” stated the head of Belarus' central bank.

Pavel Kallaur underlined that the central bank pursues its policy in close interaction with the government. “Positive results of the monetary policy have to do a lot with the measures being taken in fiscal and economic affairs. While pursuing such a balanced policy after taking care of inflation and the currency market situation, the National Bank has made a truly professional and conscious step in favor of once again reducing the refinancing rate. We know it stirred up some discussions in the general public. Nevertheless, these are totally conscious and professional actions taking into account the macroeconomic situation developing in the Belarusian economy,” stated Pavel Kallaur.

The refinancing rate in Belarus was reduced by two percentage points to 18% per annum on 17 August. The relevant decision was made by the NBRB Board and the Monetary Policy Committee on 3 August after reviewing the dynamics of inflation processes, the state of the balance of payments and the current account, the situation on the currency market and the financial market of the country. The interest rate on standing and bilateral operations designed to keep up the current liquidity of Belarusian banks was reduced from 25% to 23% per annum.

This year the refinancing rate in Belarus was also reduced on 1 July (by two percentage points to 20% per annum), on 1 May (by two percentage points to 22% per annum), and on 1 April (by one percentage point to 24% per annum). Before that the refinancing rate was changed only on 9 January 2015 by increasing it by five percentage points to 25% per annum.