The refinancing rate drops to 9.5% per annum

From August 14, 2019, the refinancing rate is reduced from 10 to 9.5 percent per annum, said the press service of the NBB.

 

The rate on the overnight loan falls from 11.5 to 10.75% per annum, while the rate on the overnight deposit - from 8.5 to 8.25% per annum.

 

The relevant decisions were taken by the Board of the NATIONAL BANK of the Republic of Belarus following the meeting on monetary policy on August 7, 2019.

 

Chairman of the National Bank Pavel Kallaur told about the factors taken into account by the regulator when deciding to reduce the refinancing rate: "The dynamics of inflation is on the expected trajectory.

 

Inflation expectations are declining, although they are higher than actual inflation. Among the external factors, the HEAD of the National Bank noted the slowdown in inflation and reduction of the key rate in RUSSIA.

 

Earlier, the National Bank explained that the intensity of inflationary processes slowed down in the second quarter of 2019. Estimation of the consumer price growth with the exception of seasonality for the quarter shows its decline below the target level of 5% (the growth was higher than this parameter during the previous three quarters).

 

"Decisions in the field of interest rate policy ensure the preservation of its neutrality in the conditions of the forecasted slowdown in inflation processes and achievement of the inflation target for 2019," said the regulator.

 

Decrease in interest rates on overnight credit and overnight deposit will ensure narrowing of the interest rate corridor on the instruments of regulation of banks' liquidity and will contribute to increasing the efficiency of the transmission mechanism of the monetary policy.

 

Further decisions in the area of key interest rates of the National Bank will depend on the ratio between inflation and deflationary factors.

 

The next meeting of the Board of the National Bank on monetary policy is scheduled for November 6, 2019.

 

Recall that the current level of refinancing rate, 10%, has been in effect since June 27, 2018 and is a repeat of the historical minimum. But the duration of such a low rate is a record-breaking one. Prior to that, in the history of independent Belarus, the refinancing rate of 10% per annum was effective only in two time periods: from December 1, 2006 to January 31, 2007 (two months), and from October 1, 2007 to June 30, 2008 (nine months).