The Board of the National Bank of the Republic of Belarus (NBRB) has decided in favor of reducing the refinancing rate from 11.5% to 11% per annum as from 18 October, representatives of the Information and Public Relations Office of the country's central bank told BelTA.
The decision was made as a result of the quarterly session held on 27 September to discuss the current state of affairs and forecasts concerning the national economy and the monetary management sphere.
The NBRB believes that inflation processes continue slowing down. In August 2017 the increase in consumer prices dropped to 5.3% year on year. Products, which are not affected by seasonal trends and administrative regulations, make the main contribution to rising consumer prices.
The consumer basket share of products, prices for which increased by less 5% year on year, rose to 63% in August 2017, from about 30% a year earlier. Taking into account the actual inflation dynamics, consumer prices are expected to increase by about 6% this year, which is below the forecasts.
The central bank still does not expect the balance of payments to increase inflation pressure in the medium term. Money supply growth rate remains moderate, with a 9% increase registered in the average broad money supply in August 2017 year on year. Certain inflation risks remain due to the comparatively high inflation expectations in the economy and the increased active component in the ruble money supply.
The central bank's consequent decisions on changing the interest rates will be made bearing in mind the probability of and the actual realization of inflation risks, which disallow reaching the medium-term inflation goal of at most 5% in 2020.
It will be the eighth time Belarus' central bank has reduced its refinancing rate this year. The refinancing rate went from 18% to 17% per annum on 18 January, down to 16% on 15 February, down to 15% on 15 March, down to 14% on 19 April, down to 13% on 14 June, down to 12% on 19 July, and down to 11.5% on 13 September.
Written by belta.by
