National Bank to lower base refinance rate to 36 percent on April 2

The National Bank of Belarus (NBB) will lower its base refinance rate from 38 to 36 percent on April 2.

The decision to further decrease the rate was made “against the background of positive trends in the economy and its financial sector, which are growing stronger,” said the NBB press office.

The country’s inflation is steadily slowing down, while individuals’ Belarusian rubel deposits with banks are increasing and the pattern of foreign trade is improving, said the press office.

“Moreover, the refinance rate and the main rates on fixed rubel financial instruments remain high both in nominal and real terms,” it said. “As a result, they ensure that the yield on rubel deposit accounts offered by banks to individuals remains at a high level, which exceeds significantly the yield on foreign currency deposit accounts and a projected inflation rate.”

The NBB reduced the refinance rate two times earlier this year: from 45 to 43 percent on February 15 and to 38 percent on March 1.

While talking to reporters in Minsk on March 5, Christopher Jarvis, head of the International Monetary Fund's mission to Belarus, said that it might have been premature to reduce the rate.

But the following day, Alyaksandr Lukashenka said at his meeting with NBB head Nadzeya Yermakova that NBB should further lower its base refinance rate.

“The refinance rate should be lowered for the economy to get cheap money,” the Belarusian leader said. He pointed out that bankers “who directly work with the real sector” were suggesting reducing the rate to make loans more accessible.