Belarus reports 0.4% m/m inflation in June

Belarus reports 0.4% m/m inflation in June
Belarus inflation falls to 2.9% in June, national bank to cut rates to 10%
By bne IntelliNews July 11, 2018

Inflation in Belarus stood at 0.4% month-on-month in June (vs 0.3% m/m deflation in May), and 2.9% year-on-year (vs 2.5% y/y inflation in May), according to the national statistics agency Belstat.

The National Bank of Belarus (NBB) is going to cut its key refinancing rate from 10.5% to 10% from June 27. The central bank attributed the move to the fact that "projections concerning the situation in economy, foreign trade, the currency market, and the deposit market indicate that the emerging money and credit conditions will keep inflation within the targeted range".

Earlier, the regulator's governor Pavel Kallaur said that the regulator estimates inflation will be about 6% in 2018.

Meanwhile, President Alexander Lukashenko believes that Belarus should have annual inflation 5%-6% in 2017. "This year's inflation is projected at 5-6%. Next year it is forecast at 4-5%. We should reach the inflation of 3-4% [in 2020]," he said in late April. "Prices should be kept under control."

In November, the International Monetary Fund (IMF) said that "further space for easing the monetary policy stance would be created by a tighter fiscal stance, lower quasi-fiscal activities, particularly directed lending, and wage increases consistent with productivity growth".

"For the medium term, the authorities should continue to lay the groundwork for the planned transition to inflation targeting, including further development of financial markets, reducing market distortions (specifically fiscal dominance), and further strengthening the NBB’s operational capacity and independence," the IMF said in a statement following the lender's mission visit to the country to conduct the Article IV consultation