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Belarus' central bank to reduce key lending rate to 13% on 14 June

MINSK (BelTA) – The refinancing rate of the National Bank of the Republic of Belarus (NBRB) will be reduced from 14% to 13% per annum on 14 June, representatives of the Information and Public Relations Office of the country's central bank told BelTA.

According to the source, the NBRB Board has decided to reduce the refinancing rate from 14% to 13% per annum as from 14 June. The interest rate on standing and bilateral operations designed to keep up the current liquidity of Belarusian banks will be reduced from 17% to 15% per annum. The interest rate on standing operations designed to drain the liquidity of Belarusian banks will go down from 9% to 8% per annum.

The decisions on the interest rate policy have been prompted by positive trends in the national economy, the improved resilience of the economy to external factors, and the stronger stability of the money and credit sphere.

Inflation in Belarus keeps slowing down faster than expected. In April 2017 consumer prices rose by 6.3% year on year while core inflation reached 6% as against 10.6% in April 2016 and 10% in December 2016. Consumer prices are expected to keep growing at an annualized rate of slightly more than 6% for the next few months.

The growth rate of money supply remains moderate. Average broad money supply is expected to increase by about 5% in annual terms in May 2017. The share of the Belarusian ruble component in money supply will continue increasing faster.

The favorable situation on the currency market continues. The net supply of foreign currency keeps the exchange rate of the Belarusian ruble stable and allows the central bank to buy foreign currency to replenish the gold and foreign exchange reserves in addition to honoring the state commitments in foreign currency.

The resilience of the Belarusian economy to external factors continues rising. A foreign trade surplus of $0.2 billion was secured in January-March 2017. This surplus helped reduce the deficit of the current account of the balance of payments to $0.9 billion while in January-March 2016 it stood at $1.5 billion.

The National Bank of the Republic of Belarus will decide on consequent reductions of the interest rates taking into account positive trends in the economy and the monetary sphere as well as the state of the balance of payments.