Press release

On June 27 the refinance rate will amount to 10% per annum

On June 27, 2018, the refinance rate will be reduced from 10.5% to 10% per annum and the interest rates on standing and bilateral transactions designed to maintain liquidity – from 11.75% to 11.5% per annum. The corresponding decision was taken on June 20, 2018 by the Board of the National Bank of the Republic of Belarus at the quarterly meeting on monetary policy. Annual inflation slows down. The forecast of the development of the situation in the economy, in foreign trade, as well as in the foreign exchange and deposit markets indicates that the monetary conditions being formed will ensure the inflation within the target parameters.

In May 2018, the increase in consumer prices totaled 4.4% on a year-on-year basis (5% in April 2018). The annual core inflation decelerated to 2.9% (3.1% in April 2018), including due to the strengthening of the Belarusian ruble against the basket of foreign currencies.

In 2018 H2, the inflation is expected to increase to a certain degree given the weaker disinflationary influence of the domestic economy, as well as the possible growth in regulated prices. The formation of the Belarusian ruble exchange rate around the equilibrium level will not put pressure on prices. Monetary conditions will remain close to neutral ones and continue ensuring the achievement of the price stability objective. It is assumed that the inflation will total 5.5% by the end of 2018.

The domestic demand impact on the dynamics of prices in the medium term is estimated as modest. A gradual reduction in inflation expectations, which is influenced by the current moderate dynamics of consumer prices and the monetary policy focus towards maintaining price stability, will be a contributory factor for curbing inflation in the medium term.

On the money supply side, inflationary risks are assessed at a low level. Following the expected acceleration at the beginning of the year, the growth in the average broad money supply gradually returns to the target range of 9-12%. In May 2018, this indicator stood at 12.3% in annual terms. The National Bank will continue creating conditions, which will support the increased willingness of the population to keep savings in Belarusian rubles, that will be also conducive to securing inflation at the target level.

The next quarterly meeting of the Board of the National Bank of the Republic of Belarus on monetary policy is planned to be held on September 19, 2018.