The National Bank of the Republic of Belarus, which has cut rates by 500 basis points this year, said a positive trade balance, along with a permanent excess supply of foreign exchange is stabilizing the Belarusian rouble, "and even strengthening it."
Belarus, a former Soviet republic located between Russia and Poland, devalued its rouble by about half during a balance of payments crises in May 2011, sparking inflation that peaked at almost 110 percent in January 2012. The central bank responded to the surge in inflation by hiking interest rates from 10.5 in January 2011 to a high of 45 percent in December that year.
Although the inflation rate was still over 100 percent, the central bank started slashing its rate in February 2012, cutting its policy rate by 1500 basis points last year - the largest amount by any central bank in the world - as inflation rapidly fell.
In March, inflation in Belarus eased to 22.2 percent from February's 22.7 percent.
In its policy guideline for 2013, the central bank expects its refinancing rate to reach 13-15 percent by the end of this year given the deceleration of inflation.