National Bank to lower base refinance rate to 34 percent on May 16

The National Bank of Belarus (NBB) will lower its base refinance rate from 36 to 34 percent on May 16, said the NBB press office on Friday.

The rate on overnights, lombard credits and swap transactions will subsequently be reduced from 60 to 55 percent and on overnight deposits from 23 to 20 percent.

Commenting on the NBB`s decision, the press office said that it had become possible because of “positive trends in the economy, above all a slowdown in the pace of inflation.”

Consumer prices rose only by 6.8 percent in the first four months of this year, with the prices of staple goods and services increasing by 6.1 percent, which allows assuming that the country’s inflation rate will not increase by more than 19 to 22 percent throughout the year as initially projected, said the press office.

An increasing surplus in Belarus’ foreign trade in goods and services, accompanied by the supply of foreign currency exceeding the demand in the domestic market also contributed to the strengthening of the Belarusian rubel, it said.

Despite the coming decrease in interest rates, the NBB’s monetary policy will continue to be quite tight to sustain the country’s macroeconomic and financial stability, added the press office.

The NBB has reduced the refinance rate three times this year: from 45 to 43 percent on February 15, to 38 percent on March 1 and to 36 percent on April 2.