On Amending the Decrees of the President of the Republic of Belarus on the Activities of the National Bank of the Republic of Belarus
On April 6, 2017, the President of the Republic of Belarus signed Decree No. 108 "On Amending the Decrees of the President of the Republic of Belarus" (hereinafter – "Decree No. 108"), which provides for the adjustment of the Statute of the National Bank of the Republic of Belarus and other acts of the Head of State with a view to increasing the efficiency of the National Bank and improving its legal status.
In particular, Decree No. 108 clarified the main objectives of the National Bank’s activities. Instead of the previously defined goal of "protecting and ensuring the stability of the Belarusian ruble, including its purchasing power and exchange rate against foreign currencies" the maintenance of price stability is established as the main objective.
The price stability (stability of the national currency’s purchasing power) means a moderate overall price increase in the economy, measured by the consumer price index. Maintaining price stability is necessary for the social and economic sphere, since it helps to reduce the uncertainty in price dynamics and facilitate the adjustment of relative prices, increase the demand for the national currency as a saving tool, prevent inflation redistribution of wealth and income, as well as promote financial stability.
The purpose of maintaining the price stability objective in the Statute of the National Bank is determined by the monetary nature of inflationary processes. The National Bank can restrain the overall inflation pressure by controlling the amount of money issue and the price of money in the economy. In the long term, the growth of the money supply, the intensity of which is determined by the increase in the supply of the national currency issued by the central bank, is completely transformed into the growth in prices. Accordingly, the need to control the money supply is the reason for the worldwide trend of transferring the price stability function under the responsibility of the central bank (European Central Bank, Central Bank of the Russian Federation, National Bank of Kazakhstan and others).
Thus, ensuring the price stability, the central bank contributes to the achievement of other, broader economic goals, including the ultimate goal of state economic policy – improving the welfare of citizens.
At the same time, the National Bank can not directly influence administratively regulated prices, prices of natural monopolies or prices of separate goods. The implementation of the state policy in the field of pricing, including the development of unified approaches to the methodology for the formation of regulated prices and tariffs, the regulation of prices of natural monopolies and prices for separate goods, the works and services of economic entities occupying a dominant position in the commodity markets is carried out by the Ministry of Antimonopoly Regulation and Trade of the Republic of Belarus. It should be noted that the pricing policy implemented in the Republic of Belarus is based on the reduction of the sphere of direct state regulation, development of competition and market pricing instruments.
Decree No. 108 also specified and expanded certain functions of the National Bank. In particular, the National Bank is authorized to:
– control the activities of the open joint-stock company "Belarusian Currency and Stock Exchange" (regarding the implementation of certain banking operations by the given company) with respect to compliance with the legislation on preventing the legalization of proceeds from crime, financing terrorist activities and financing the proliferation of weapons of mass destruction;
– determine the ways and procedures for ensuring the performance of obligations arising from interbank settlements on transactions using bank payment cards; and
– organize the performance of scientific researches on the activities of the National Bank and the banking sector.
In order to optimize the activities of the National Bank, Decree No. 108 reduced the number of members of the Board of the National Bank from 11 to 9 people, clarified the procedures for appointing Deputies Chairman of the Board of the National Bank and other members of the Board of the National Bank, redistributed powers to dispose property not related to fixed assets (inventory, tools and other items and materials), as well as changed the procedure for issuing powers of attorney on behalf of the National Bank.
Decree No. 108 shall come into force three months after its official publication.