August 17, Minsk /BELTA/. The refinancing rate in Belarus will be reduced by 2 percentage points to 18% per annum from August 17. This was reported to BELTA by the Information and Public Relations Department of the National Bank.
From August 17, the refinancing rate will be reduced from 20% to 18% per annum, and the rates on standing facilities and two-sided operations of the National Bank to support banks' current liquidity will be reduced from 25% to 23% per annum.
These decisions were made by the Board and the Monetary Policy Committee of the National Bank on August 3, based on the analysis of the dynamics of inflationary processes, the state of the balance of payments and its current account, and the situation in the republic's currency and financial markets.
In June, inflation slowed down to 12.1% year-on-year. At the same time, the average monthly increase in consumer prices in the second quarter of 2016 was 0.5% (compared to 0.8% in the same period of 2015). A similar trend is shown by trend inflation, the aggregated indicator of which decreased in June 2016 compared to June 2015 to 10.3%.
The dynamics of monetary aggregates create conditions for further inflation reduction. The increase in the average broad money supply in June year-on-year was 14.1%.
"The expansion of the current account deficit of the balance of payments recorded in the first half of the current year was primarily due to the deterioration of trade conditions for energy products and a decrease in demand for potash fertilizers. At the same time, in the sphere of foreign economic activity, independent of conjuncture factors, the positive impact of economic adjustment measures persists," the National Bank noted.
Specialists stated that since February, there has been a net supply of foreign currency in the domestic currency market, including in the corporate segment.
The structure of the deposit market is improving, primarily due to the reorientation of depositors to irrevocable deposits with longer terms.
"A reduction in interest rates will improve the ability of non-financial organizations to meet their credit obligations to banks, thereby reducing risks to financial stability," the National Bank explained.
The possibilities for further decisions by the National Bank in the area of interest rate policy will be determined based on the correspondence of inflation dynamics to the forecast trajectory, the state of the balance of payments and its individual components.-0-