National Bank of Belarus Drops Rate 200bps to 36.00%

The National Bank of the Republic of Belarus cut its refinancing rate by 200 basis points to 36.00% from 38.00%; continuing to unwind a string of aggressive rate hikes.  The Bank said [translated]: "The National Bank carries out a gradual decline in interest rates against a background of strengthening positive trends in the economy and the monetary sphere. So, steadily slowing inflation, steady growth in ruble deposits of the population, improving the state of foreign trade... Further dynamics of the refinancing rate will be determined primarily by the intensity of inflation processes and the situation in the economy and the monetary sphere."

The bank also dropped the rate by 500 basis points and 200 basis points last month, and last hiked the rate by 500 basis point for the third time in a row in December last year.  The bank increased the rate a total of 3450 basis points in 2011.  Belarus reported consumer price inflation at hyperinflationary levels of 107.4% in February, down from 109.7% in January this year, up from 92.3% in October, up from 79.6% in September, and 36.2% in the year to June, according to the National Statistic Committee.  

Senior Bank officials have previously noted a desire to reduce the rate to around 20% this year.  The USD-Belarussian ruble (BYR) exchange rate has doubled on the black market, rising to as much as 7,000 per dollar (approx. 6,000 in July), and currently trades around 8050 (5350 in September) against the US dollar, according to quotes from Yahoo Finance.

www.CentralBankNews.info