Wednesday, June 28, 2017

Belarus cuts rate by 100 bps for sixth month in a row

    The central bank of Belarus cut its benchmark refinancing rate by 100 basis points for the sixth month in a row and said the possibility of further rate cuts would be determined by the continued easing of the risks to inflation.
     The National Bank of the Republic of Belarus cut its refi rate to 12.0 percent from 13.0 percent and has now cut it by 600 basis this year. Since March 2016, when the central bank began lowering rates from 25 percent, the rate has be cut by 1,300 points.
      The central bank said inflation expectations had continued to ease and this would have a favorable effect on the rise in prices in coming months. 
     It added the average annual growth of broad money was around 5 percent in June and the continued net supply of foreign currency to the domestic market had a positive impact on International reserves and ensured a stable exchange rate of the Belarus ruble.
     Inflation in Belarus was estimated by the central bank at 6.2 percent, slightly up from 6.1 percent in May but down from 6.3 percent in April. Core inflation confirmed the growing stability of decelerating inflation and was estimated at 5.3 percent in June.
     Last month the central bank said it expected inflation to remain slightly above 6 percent in coming months.
     The Belarus ruble fell steadily, and at times very rapidly, from early 2011 until it hit a record low of just over 22,00 to the U.S. dollar in February 2016. Since then it has been appreciating and was trading at 19,319 to the dollar today, up 1.74 percent since the beginning of 2017.


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