Interest rate cuts on loans in Belarus will continue - P. Prokopovich

20 July, Minsk /BELTA/. Work to reduce interest rates on loans in Belarus will be continued in the third and fourth quarters. This was reported to the President of Belarus Alexander Lukashenko on July 19 by the Chairman of the Board of the National Bank of Belarus Petr Prokopovich, BELTA was informed by the press service of the head of state. As Petr Prokopovich noted, a great deal of work was done in the first half of 2010 to reduce interest rates on loans. In general, over 6 months of the year, interest rates have been reduced for legal entities by more than 5 percentage points. Thus, if in January the average interest rate on issued loans was over 21%, then by the end of June it was 16.5% in general, and for legal entities - an average of 15.4%. The refinancing rate has been reduced from 14% to 11.5% during this period. The head of state was informed about the implementation of the Main Directions of Monetary Policy in the first half of 2010. The main task of the National Bank in the first half of the year was to ensure the implementation of those directions that create the necessary conditions for the implementation of the country's socio-economic development program. These include, first of all, ensuring the stable exchange rate of the national currency, the necessary volumes of lending to the economy, conducting an appropriate interest rate policy, and reliable operation of the payment system. As reported to the President, all tasks set by the Main Directions of Monetary Policy were fully completed in the first half of the year. The exchange rate of the Belarusian ruble against a basket of currencies remained stable throughout the half-year, with no sharp fluctuations; in general, by the end of the half-year, the Belarusian ruble strengthened against the basket of currencies by 1.1%. According to the National Bank's expectations, the exchange rate of the Belarusian ruble will remain stable until the end of the year. In addition, all necessary conditions exist for the fluctuations of the Belarusian ruble exchange rate to remain within the corridor of +/- 2-3% until the end of the year. This includes appropriate gold and foreign exchange reserves: as of July 1, in national terms, they exceeded $6 billion.

Significant attention has been paid in the country to the crediting of the real sector of the economy. As of July 1, 2010, compared to July 1 of the previous year, the credit debt of enterprises to banks increased 1.32 times, with virtually all credit needs being met. Therefore, special attention was paid to the crediting of state programs, which increased by 1.4 times. Preferential housing loans developed at the fastest pace. Compared to the same period last year, in January-June of this year, it increased by more than 1.54 times.

As assured by the head of the National Bank, the banking system currently has all the necessary resources to ensure further crediting of the economy. He also noted the importance of all banks, not just state-owned ones, providing credit to the economy.

In the first half of the year, the payment system operated reliably and without interruption. All payments are processed in a timely manner, and the banking system is fully provided with the necessary resources. If at the beginning of the year the liquidity of banks was insufficient, the situation changed dramatically from March. The National Bank is forced to withdraw excess money from banks through buybacks, sale of securities, etc.

Pyotr Prokopovich expressed hope that in the near future the activity of enterprises will increase, leading to more effective projects being presented, and that crediting in the second half of the year will proceed at a faster pace than in the first.

Overall, the banking system is ensuring all the indicators necessary for the implementation of the socio-economic development program for the current year.

The head of state demanded that the banking system operate just as clearly until the end of the year, especially in areas related to the crediting of the economy and the reduction of interest rates.

The President was also informed about the progress of fulfilling some of his other instructions, including the development of rowing sports. A Rowing Sports Union has been established in the country, uniting the Belarusian Rowing Federation and the Belarusian Canoe Association. Pyotr Prokopovich is the chairman of the new association. The most important event in the near future is the Youth World Rowing Championships, which begin this week in Brest. 50 teams from 57 countries (over 1400 athletes) will gather here. -0-

BELTA