National Bank Cuts Refinancing Rate Again

Since July 1 the refinancing rate in Belarus is cut to 20% from 22%.

It has been informed by the press-service of the National Bank with a reference to decisions of the board and the National Bank’s Committee on the Monetary Policy.

The previous cut, by 2% as well, took place on May 1.

Rates on constantly available and bilateral operations on maintaining current liquidity ratio are cut from 27% to 25%, and rates on permanent affordable operations to withdraw liquidity – from 15% to 13% per annum.

Moreover, since August 1 the maximal level of interest rates on new private fixed bank deposits in the national currency, in case of exceeding of which it is provided an increase of reserve requirements from 1.0 to 0.9 of the rate in permanent affordable operations of the National Bank (overnight loans).

“These decisions have been adopted primarily because inflation processes have slowed down – the National Bank of Belarus notes. According to the Belarusian National Statistics Committee, the consumer price increase in May dropped to 0.05% as compared to April 2016, and to 12.4% as compared to May 2015.

The annual increase of the average broad money supply in May 2016 was 18.9%.

“The dynamics of this index is shaping conditions for further decline in inflation, caused by monetary factors. Against the background of the decline in the value of resources in the currency market it is making it possible to continue the policy of decreasing risk premia in interest rates,” – the National Bank comments.