Belarus central bank to cut key rate by 1 pp to 13%

By bne IntelliNews May 31, 2017

The National Bank of Belarus (NBB) will reduce its benchmark interest rate by 1 percentage point (pp) to 13% on June 14, the regulator said on May 31.

The central bank attributed the move to "positive trends in the economy, increasing its external stability, strengthening the stability in the monetary and credit sphere". Specifically, the NBB forecasts an increase in consumer prices to a level "slightly above" 6% in annual terms in the coming months.

According to official data, inflation in Belarus stood at 6.3% year-on-year (vs 10.6% in December 2016) in April, while core inflation - at 6% y/y (vs 10% in December).

The interest rate on standing and bilateral operations designed to keep up the current liquidity of Belarusian banks was reduced from 17% to 15% per annum, while the rates on standing liquidity absorption transactions - from 9% to 8% per annum.

In April, the NBB reduced its benchmark interest rate by 1 pp to 14%. The regulator says a further cut was possible due to the positive dynamics of inflation, as well as favourable trends in the foreign exchange and deposit markets.

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