The National Bank of Belarus (NBB) will reduce its benchmark interest rate by 1 percentage point to 16% as from February 15, the regulator said in a statement on February 7.
The regulator attributed the move to the dynamics of consumer prices, the situation on the currency and deposit markets, and the country's foreign trade and balance of payments.
In particular, the consumer price index came in at 10.6% year-on-year in December, below the target of 12% y/y, the NBB said, forecasting the consumer price increase at 9.6% in January (in annual terms) and at around 9% in February-March.
"Monetary factors continue to exert a major influence on inflation. Average broad money supply increased by 0.3% y/y in January 2017, which corresponds to the evolving macroeconomic conditions," the central bank added.
The net foreign currency supply observed on the domestic currency market was mainly due to the sale of foreign currency by individuals. In the business segment the currency supply and demand were "balanced", the regulator underlined.
In early January, the NBB said that the possibilities of further reduction in interest rates will be determined by a steady decline in the growth rate of consumer prices, correspondence of its actual dynamics to the forecast, as well as the state of the country's balance of payments. The regulator intends to cut its benchmark interest rate to 14-16% by the end of 2017.
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